Example:-X is employed by a company. He has been provided a car (1200cc) owned by employer, cost of the car is ₹ 4,26,000. The expenditure incurred by the company on maintenance of the car are – petrol: ₹ 46,000, driver: ₹ 36,000 and maintenance: ₹ 10,000. The car can be used by X partly for official purposes partly for personal purposes. A sum of ₹ 12,000 is recovered from X.

Chapter No. 14 - Salary - Perquisites - Motor Car - (Rent Free / Concessional) - Rule 3(2)

Since car engine capacity is less than 1600cc, the perquisite will be valued as follows:

Car (1800 x 12)                                                                                               21,600

Driver (900 x 12)                                                                                             10,800

TOTAL (Amount recovered from X is not deductible)                                    32,400

If in the above example the car is used only for private purposes then, the value of perquisites will be determined as follows:

Depreciation (10% of  4,26,000)                                                                     42,600

Petrol                                                                                                              46,000

Driver                                                                                                              36,000

Maintenance                                                                                                   10,000

TOTAL                                                                                                                         1,34,600

Less: Amount recovered from X                                                                     12,000

Value of Perquisite                                                                                        1,22,600

Dated: 11-8-2015