Share |
 

Valuation of Perquisite of Motor Car or any Other Automotive Conveyance [Rule 3(2)] for Computing Salary Income

 

In case employer had provided a car or any other vehicle for the private use of the employee or any other member of his family, it is a perquisite which is taxable in the hands of the employee provided he/she is a employee of a specified category.

The valuation of this perk shall be made as under:

A.        Motor car is owned or hired by employer and its running and maintenance expenses are met or reimbursed by employer.

A. (1) Car is fully used in the performance of official duties of the employee.

When car is used for official work only and the employer or his family is not deriving any benefit, so no perk will be considered in this case. In this case employer is required to maintain complete record of journeys undertaken like date of journey, destination, mileage, amount spent etc. so a log book is required to be maintained. Employer is also required to give a certificate that the expenditure on car had been incurred wholly and exclusively for official work.

Value of Perk = NIL

Note. It does not matter whether the cubic capacity of engine of motor car exceeds 1.6 litres or not.

A. (2) Car is fully used for the private, personal or family purposes of the employee.

When employee or any member of his household is fully using the car for their private/family purpose, so it is a perk taxable in the hands of the employee. Find out the amount spent by the employer on petrol, repairs, depreciation @ 10% of cost of car or cars, salary of driver etc. and in case any amount is charged from the employee the same shall be deducted out of above mentioned expenses incurred by employer and the amount so derived shall be the valuation of this perk.

A(3)    Car is used partly in the performance of duties and partly for private or personal purposes.

(i)         The expenses on maintenance and running are met or reimbursed by the employer

  1. Where cubic capacity of engine does not exceed 1.6 litres ` 1,800 p.m.

  2. Where cubic capacity of engine exceeds 1.6 litres ` 2,400 p.m.

(ii)        The expenses on running and maintenance for private or personal use are fully met by employee himself

  1. Where cubic capacity of engine does not exceed 1.6 litres ` 600 p.m.

  2. Where cubic capacity of engine exceeds 1.6 litres ` 900 p.m.

(iii)       Facility of Chauffeur. In case of chauffeur or driver is also provided by employer to run the motor car ` 900 p.m. shall be added in the above mentioned amounts mentioned in point (i) and (ii) above.

Value of Perk = Amount specified for use of car + ` 900 p.m. for driver’s salary.

Note.:  No deduction shall be allowed out of the value of perk calculated as per points (i), (ii) and (iii) above in respect of any amount charged/recovered by employer from employee as such account.

B.         Car is owned by employee but its running and maintenance expenses are met or reimbursed by employer

(i) Car is being used wholly and exclusively for official purposes.

No value to be taxed but a proper log book must be maintained.

(ii) Car is being used partly for official purposes and partly for personal or private purposes.

Taxable value of this perk shall be calculated as under :

Find out the actual amount of expenditure incurred by employer                     * * *

Less :   1800 p.m. for small car and 2,400 p.m. for big car plus
     ` 900 p.m. for driver or a higher sum for official purposes subject
           to certain conditions                                                                                     * * *

Value of perk                                                                                                             * * *

C.         Where the employee owns any other automotive conveyance but the actual running and maintenance expensive are met or reimbursed by the employer

(i) Employee ‘s convenyance is being used only for official purposes

No value to be taxed but a proper log book is required to be maintained.

(ii) Employee ‘s convenyance used partly for official purposes and partly for personal or private purposes of the employee.

Taxable value of the perk shall be the actual amount of expenditure incurred by the employer as reduced by the amount of 900 p.m. or a higher sum for official purposes subject to certain conditions.

Conditions for claiming higher amount as deduction in respect of official purpose [Applicable to points B and C above]

  1. The employer has maintained complete record/details of journey undertaken for official purposes covering date of journey, destination, mileage and the amount of expenditure incurred thereon; and

  2. The employer gives the certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties.

Employee or any member of his household uses more than one car belonging to employer

Valuation of one car (at the choice of the employee) shall be @ ` 1,800 p.m. or ` 2,400 p.m. as the case may be and the valuation of any other car or cars shall be made as if he had been provided with such a car or cars exclusively for his private or personal purposes.

Car at concessional rate :

First of all calculate the value as if car has been provided totally free of cost               * * *

Less any amount charged from the employee for the use of the car                             * * *

Value of perk to be taxed                                                                                                     * * *

Free use of car between office and residence :

Use of employer’s car to go to the place of employee’s work and come back to his residence is not a taxable perk and hence it is ignored.

Conveyance facility to high court and Supreme Court judges

It is fully exempted.

Meaning of Month

Month means a complete calender month and if there is a part of the month, the same shall be ignored.

 
More.. Topics ... @ ' SALARY'
Salary-Definition & Meaning

Computation of Salary Income

Definition of Word ‘Salary’ [ Section 17(1)]

Section-15 : List of Incomes Chargeable to Income Tax under the head ‘ SALARIES’

Important Points / Characteristics for Computing Salary Income

Provident Fund

Treatment of Provident Funds (PF) for Computing Salary Income

Taxable Portion of annual accretion to RPF [Section 17(1)(vii)]. for Computing Salary Income

Transferred Balance from URPF to RPF [Section 17(1)(vii] for Computing Salary Income

Refund from Provident Fund [Section 17(3)(ii)] for Computing Salary Income

New Pension Scheme [ NPS] for Central Government and other Employees joining new jobs on or after 1-1-2004 for Computing Salary Income

 
Allowance [ Section 17(3)]

Allowance [ Section 17(3)] – for Computing ‘Salary’ Income

Fully Exempted Allowances for Computing ‘Salary’ Income

Fully Taxable Allowances for Computing ‘Salary’ Income

House Rent Allowance (HRA) for Computing ‘Salary’ Income

Allowances covered u/s 10 (14) for Computing ‘Salary’ Income

Meaning Of Salary For Different Purposes
PERQUISITES [Section 17(2)]

Meaning and Types of Perquisites [ Section 17(2)]

Taxability of Perquisites for Computing Salary Income

Perks Exempted From Tax for all Employees and not added in Salary Income

Rent Free House [Section 17(2)(i) Rule 3(1)]

Rules Regarding Calculation Of Value Of Rent Free House

Valuation Of Rent Free Accomodation (Unfurnished & Furnished)

Valuation of Rent Free Accommodation Provided as Concessional Rent [Sec. 17(2)ii)]

Obligation of Employee of Rent Free House met by Employer [Section 17(2)(iv)]

Sum payable by the Employer directly or through a fund to effect an assurance / an annuity [Section 17(2)(v)]

Any specified security or sweat equity shares allotted or transferred to employee [Section 17(2)(vi)] [ w.e.f. 1-4-2009]

Contribution to an Approved Superannuation Fund by the Employer [Sec. 17(2)(vii)]

Interest free or Concessional loan from employer [Rule 3(7)(i)]

Valuation of Perk in respect of Travelling, Touring, Accommodation

Food or Beverages Facility by Employer to Employee

Valuation of Perquisite in respect of Gift Voucher or Token

Valuation of Perquisite in respect of Credit Card

Valuation of Perquisite in respect of Club Facility

Use of Moveable Assets by Employer to Employee

Transfer Of Moveable Assets to the employee

Meaning of Specified Employee for Taxable Perquisites [Section 17(2)(iii) Rule 3]

Valuation of Perquisite of Motor Car or any Other Automotive Conveyance [Rule 3(2)]

Perquisite of Free domestic servants [Rule 3(3)]

Perquisite in respect of free supply of gas, electric energy, water supply [Rule 3(4)]

Free Educational Facilities to Children of Employee’s Household [Rule 3(5)]

Facility of Free or Concessional Private Journey to an employee by the employer engaged in the carriage of passengers or goods [Rule 3(6)]
PROFITS IN LIEU OF SALARY [17(3)]

Receipts treated as Profit in Lieu of Salary [ Section 17(3)]

Leave Travel Concessional (LTC) Assistance [Section 10(5)]

Death-Cum-Retirement Gratuity [Section 10(10)]

Non-Government employees receiving gratuity under payment of Gratuity Act, 1972 [POGA]

Non-Government Employees receiving gratuity (Not covered under payment of Gratuity Act)

PENSION [Monthly and Commuted] for Computing Salary Income

Leave Encashment [Section 10(10AA)] for Computing Salary Income

Any amount received as compensation on termination of employment [Section-10B]

Any amount received on voluntary retirement [Section 10(10C)]

Payment received from Recognised Provident Fund [Section 10(12)]

Any payment from Superannuation Fund [Section 10(13)]

 
DEDUCTIONS OUT OF GROSS SALARY [ Section-16]

Entertainment Allowance to Government Employees [Section-16(ii)]

Tax on Employment Under Section - 16(iii)

 
DEDUCTIONS U/S 80C OUT OF GROSS TOTAL INCOME

Section - 80C : Deductions from Gross Total Income (GTI) in case of Individual and HUF

Qualifying Amount ( Q.A.) for Deduction U/s 80C

Previous Topic
Contents : Salary Income
Next Topic
 

BUDGET 2017

:: How These 8 Hot Tips can lead to Cool Tax Saving in Budget 2017
 
:: How to Pay Less Income Tax Post Budget 2017 and Beyond ....
 
:: Salient Features of Direct Tax Proposals in Union Budget 2017
 
:: New Tax Rates For FY 2017-18 & AY 2018-19 (Budget 2017)
 
:: TAX Benefit for Taxable Income in Budget 2017-2018
 
:: Point wise Summarise of Budget 2017
 
:: Key Features / Highlights of Budget 2017-2018
 
:: Important Points on Union Budget 2017
 
How is a Search Operation Conducted by Income Tax Department ?
The provisions relating to search and seizure are contained in section 132 of the Income Tax Act, 1961...
 
Sec. 143(3) : Scrutiny Assessments by Income Tax Department
Scrutiny assessment refers to the examination of a return of income by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence..
 
“Penalties” Under Income Tax Act. 1956
Penalties by way of monetary payments are charged under the Income Tax Act for various defaults relating to payment of taxes, maintenance of accounts, for noncompliance and non co-operation during proceedings, for evasion of tax, etc..
 
Income of Individuals And HUFs – As a Tax Payers Under Income Tax Act, 1961.
The individual tax payers and also the HUFs while proceeding to calculate the net taxable income in the first phase are required to arrive at the gross total income under different heads of income...
 
Types Of Income Subject To TDS [Deduction Of Tax At Source]
The following types of incomes are mainly subject to deduction of tax at source: (a) Salaries Section 192. (b) Interest on securities Section 193..
 
Pre-Requisite For Claiming Income Tax Refund
For claiming income tax refund the first prerequisite is that there should have been excess tax paid or deducted at source on the basis of return of income.
 
Section-139(1) : Provision for Voluntary Income Tax Return
Every person,— (a) being a company or a firm; (whether having income or loss) or (b) being a person other than a company or a firm if his total income or the total ncome of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall file a return of his income in the prescribed form.
 
Benefits of Filing Income Tax Returnsn
We have heard many a times that every individual whose total income exceeds the maximum exemption limit is obligated to furnish his/her Income Tax Return or ITR.
 
Section-139(9): Defective Tax Return
Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of 15 days from the date of intimation.
 
Section 139(5) : Revised Income Tax Return
If any person, having furnished a return u/s 139(1), or in pursuance of a notice issued under section 142(1), discovers any omission or any wrong statement therein, he may furnish a revised return at any time.
 
Section-139(4A) : Income Tax Return of Charitable and Religious Trusts
Every person in receipt of income derived from property held under trust or other legal obligation wholly or partly for charitable or religious purposes or of income being voluntary contributions referred to in section 2(24)(iia) shall.
 
Section-139(4) : Belated Income Tax Return
If an assessee has not furnished a return of his income within the time allowed to him under section 139(1) or within the time allowed under a notice issued under section 142(1).
Get Updated ...
 
LIBRARY @ Tax Management
TAX & INVESTMENT GUIDE FOR "NRI"- Non-Resident Indians !
GUIDE & FAQ @ TAX
GRAPHICAL PRESENTATION @ TAX
TIPS & TRICKS @ TAX
MANAGERIAL & FINANCIAL DECISIONS @ TAX
5 GOLDEN RULES OF TAX PLANNING
FAMILY TAX PLANNING
DEDUCTIONS FROM YOUR INCOME
EXEMPTED INCOMES
HUF - FORMATION, MANAGEMENT & TAX PLANNING
COMPUTATION OF GROSS TOAL INCOME
INCOME TAX @ GLANCE
MULTIPLE KNOWLEDGEBASE ON TAX
51 TIPS ON TAX PLANNING
APPEALS UNDER INCOME TAX
ASSESSMENTS
PENALTIES UNDER IT DEPATMENTS
TAX SAVING SCHEMES
TAX READY RECKONER
TAX RATES
PROSECUTIONS UNDER INCOME TAX DEPARTMENT
TAXATION SYSTEM IN INDIA
CHARITABLE & RELIGIOUS TRUST - TAXATION
 

Most Popular Topics :

Corporate Tax ( Taxation in Companies)
FAQ on TDS on Salaries
FAQ on Taxable Income
FAQ on Filing of Income Tax Return
Graphical Chat Presentation of Provision of Motor Car / Other Vehicles [Rule 3(2)(A)&(B)]
Tax Amendment at a Glance for Year 2015
'Appeals' Under Income Tax Act. 1961.
'Assessments' Under Income Tax Act. 1961.
List of Exempted Incomes (Tax-Free) Under Section-10
Income Under the Head ' Business and Professions' [Section 28 to 44]
Income Under the Head ' Capital Gain'
Income Under the Head ' House Property '[Section- 22 - 25 ]
Income Under the Head "Salary"
[Section 15-17]
Income Tax on 'Partnership Firms'
PENALTIES Under Income Tax Act. 1961.
Tax Saving Schemes for Individual for AY 2015-2016-Instant Guide
Income Tax Rates / Tax Slabs (AY-2014-2015 & 2015-2016)
"Exempted Incomes" under Income Tax Act.
Charitable & Religious Trust :Formation, Registration, & Taxation
Hindu Undivided Family [HUF] - Formation, Management and Taxation

Most Popular Links :

Clubing of Income Deduction U/s 80C
Allowances Us-17(3) Exemption-Salary
Tax Amendment-2015 Taxable Income
Clubing of Income Tax Deductions
HUF Deduction HUF Investment
Gift by HUF HUF Tax Planning Tips
Tax Saving Schemes Tax Planning Tips
Refund of Tax Fringe Benefit Tax-FBT
Return Filing Assessment / Scrutiny
Notice from I.T. Dept. Incomes Types @ TDS
Exemptions-Tax Returns “Summon” U/s 131
'Black Money' @ I.Tax Big Gifts To Be Taxed
'Appeals' under I.Tax Assessment @ I.Tax
Exempted Incomes Capital Gain
Business & Professions House Property
Salaries @ I.Tax Partnership Firm
'Penalty' under I.Tax Act. Tax Ready Reckoner
Charitable Trust Useful Links @ I.Tax
 
 
 
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
TRUSTs (Formation, Management & Taxation) NRI (Tax Planning,Saving,Investemnt) Budget 2017-2018  

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications

 
Contact Us :

SWAYAM EDUCATION
Mandal Bagicha, Hemkapada,
Sunhat, Balasore-756002 ( Odisha)
eMail ID : incometaxmanagement@gmail.com

www.IncomeTaxManagement.Com