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 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

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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 Salary840000
(70000*12) 
  
Motor Car Perquisite0
(fully exempt) 
INCOME FROM SALARY840000

--endanswer--

 

 

PERSONAL PURPOSE

--answer--

Basic Salary840000
(70000*12) 
  
Motor Car Perquisite 
Dep on Car600000
(6000000*10%) 
  
INCOME FROM SALARY1440000

--endanswer--

 

PARTLY OFFICIAL PARTLY PERSONAL

--answer--

Basic Salary600000
(50000*12) 
  
Motor Car Perquisite 
Car+ Expenses28800
2400*12 
  
Add 
Driver Salary0
  
  
INCOME FROM SALARY628800

--endanswer--

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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 pm5000
Diesel40000
Maintenance Exp30000

 

What is amt taxable if Car used for

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

 

OFFICIAL PURPOSE

--answer--

  
Basic Salary600000
(50000*12) 
  
Motor Car Perquisite0
(fully exempt) 
INCOME FROM SALARY600000

--endanswer--

 

PERSONAL PURPOSE

--answer--

Basic Salary 600000
(50000*12)  
   
Motor Car Perquisite  
Dep on Car30000 
(300000*10%)  
Diesel40000 
Maintenance Exp30000 
Driver Salary60000160000
   
   
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--

 

 

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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--

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.
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