Motor Car Given by Company to Employee - Taxability of Perquisites

 

*Small Car:-Upto 1600 cc (or 1.6 litres)

**Large car :->1600 cc or (>1.6litre)

 If any amount recovered from employee ,it is NOT REDUCED

---------------------------------------------------------------------------------------------------------

EXAMPLE  

ONLY CAR GIVEN BY COMPANY

Q1

Employee gets Basic Salary of 70000 pm. He is given a BMW  Car (2500 CC)

by the company

The company pays following expenses for car during year

Car Cost =Rs 60,00,000 

What is amt taxable if Car used for

  1. Official purpose
  2. Personal Purpose
  3. Partly Official Partially personal purpose

 

OFFICIAL PURPOSE

--answer--

Official purpose  
Basic Salary 840000
(70000*12)  
   
Motor Car Perquisite 0
(fully exempt)  
INCOME FROM SALARY 840000

--endanswer--

 

 

PERSONAL PURPOSE

--answer--

Basic Salary 840000
(70000*12)  
   
Motor Car Perquisite  
Dep on Car 600000
(6000000*10%)  
   
INCOME FROM SALARY 1440000

--endanswer--

 

PARTLY OFFICIAL PARTLY PERSONAL

--answer--

Basic Salary 600000
(50000*12)  
   
Motor Car Perquisite  
Car+ Expenses 28800
2400*12  
   
Add  
Driver Salary 0
   
   
INCOME FROM SALARY 628800

--endanswer--

 ------------------------------------------------------------------------------------------------------------------------

Q2

CAR+EXPENSES GIVEN BY COMPANY

 

Employee gets Basic Salary of 50000 pm. He is given a small car by the company

The company pays following expenses for car during year

Car Cost (800 CC) 300000
Driver Salary pm 5000
Diesel 40000
Maintenance Exp 30000

 

What is amt taxable if Car used for

  1. Official purpose
  2. Personal Purpose
  3. Partly Official Partly Personal purpose

 

OFFICIAL PURPOSE

--answer--

   
Basic Salary 600000
(50000*12)  
   
Motor Car Perquisite 0
(fully exempt)  
INCOME FROM SALARY 600000

--endanswer--

 

PERSONAL PURPOSE

--answer--

Basic Salary   600000
(50000*12)    
     
Motor Car Perquisite    
Dep on Car 30000  
(300000*10%)    
Diesel 40000  
Maintenance Exp 30000  
Driver Salary 60000 160000
     
     
INCOME FROM SALARY   760000

--endanswer--

 

 

PARTLY OFFICIAL PARTLY PERSONAL

--answer--

Basic Salary   600000
(50000*12)    
     
Motor Car Perquisite    
Car+ Expenses   21600
1800*12    
     
Add    
Driver Salary   10800
(900*12)    
     
INCOME FROM SALARY   632400

 

--endanswer--

 

 

---------------------------------------------------------------------------------------- 

Q3

Suppose in Q2 company deducts 2000 p.m for car provided

--answer--

Same as last

It is not reduced while calculating taxable perquisite

--endanswer--

  1. Income Tax
  2. Income from Salaries
Ask Download

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
Jail