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Tax4india ›› Salary And Perquisites›› Perquisites››Motor Or Other Vehical Provided By The Employer
Perquisite Value On Account Of Motorcars Or Other Vehicles Provided By The Employer
When an employee provided motor car by his employer, the value of the benefit is taxable as perquisite in the hands of the employee. The rules for valuation of motorcar or other vehicles are explained as under . The value is determined on the basis of many factors namely if the car is owned by the employee or the car is owned by the employer.
- When the car is owned by the employee and the maintenance and running expenses are reimbursed by the employer.
- When the car is used wholly for official purposes, the value of the benefit is not a taxable perquisite.
- When the car is used for private purposes the actual expenditure reimbursed by the employer is a taxable perrquisite.
- When the car is used partly for official and partlly for private purposes the Assessing Officer can reasonably apportion the amount and determine the taxable perquisite.
- When the car is owned or hired by the employer and the maintenance and running expenses are reimbursed by the employer.
- When the car is used wholly for official purposes, the value of the benefit is not a taxable perquisite.
- When the car is used for private purposes only, then the actual expenditure incurred by the employer on the running and maintenance , normal depreciation and the salary of the driver if any and hire charges of the car are taxable as a perquisite.
- When the car is used partly for official purposes and partly for private purposes, the reasonable proportion of the sum spent by the employer.
- If it is difficult to work out such proportion and if the Horse Power does not exceed 16 and the engines capacity is 1.88 litres, then Rs. 600/- per month is the taxable perquisite and if the driver is provided Rs. 300/- is the additional sum of the perquisite for the driver.
- When the Horse Power rating exceeds 16, the value of the perquisite is Rs. 800/- per month and if the driver is provided Rs. 300/- is the additional sum of the perquisite for the driver.
- When maintenance and running expenses are met by the employee.
- If the car is used for private purposes then the normal running and maintenance expenses are taxable perquisites.
- When the car is used for partly for official and partly for personal purposes and if it is difficult to work out the proportion.
- Then Rs. 200 per month for a car upto 16 Horse Power and enginge capacity 1.88 Litres is the taxable perquisite. If a driver is provided additional sum of Rs. 300 per month is the taxable perquisite.
- If the Horse Power rating does exceed 16 and engine capacity exceeding 1.88 litres then Rs. 300 per month is the taxable perquiste. If a driver is provided additional sum of Rs. 300 per month is the taxable perquisite.
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