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
Where cubic capacity of engine does not exceed 1.6 litres ` 1,800 p.m.
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
Where cubic capacity of engine does not exceed 1.6 litres ` 600 p.m.
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]
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
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.