Guide to .. Tax Management ,Tax Planning and Tax Saving
 

Valuation of Perquisite of Motor Car and other Modes of Conveyance [Rule 3(2)] for Computing Salary Income

1. When the Motor Car is Owned or Hired by the Employer

A. Motor Car is used wholly and exclusively in the performance of Official Duties :

  • When the CC is less than / or more than 1600 CC : -

    • Perquisites Value is NIL

B. Motor Car is used exclusively for Private / Personal Purposes :

  • When the CC is less than / or more than 1600 CC : -

    • Perquisites value is actual Expenditure incurred by the employer on the running and maintenance of Car + Salary of Chauffeur + Normal Wear and Tear ( i.e. 10% p.a. of the Vehicle Cost) or Hire Charges.

    • In case Expenses on Maintenance and running are met by the Employee : Perquisites Value is confined to Salary paid to Chauffeur and normal Wear and Tear ( i.r. 10% p.a. of the Vehicle Cost).

    • If any amount is recovered from employee the same shall be Deducted from the Perquisite Value.

    Exempted Perquisites

C. Motor Car is Used Partly in the performance of Duties and Partly for Private / Personal Purposes.

  1. When CC does not exceed 1600 CC :

  • When Expenses on maintenance and running are met by the Employer ..

    • Perquisites Value is Rs. 1800 p.m. ( plus Rs.900 if Chauffeur is provided)

  • When Expenses on maintenance and running are met by the Employee ..

    • Perquisites Value is Rs. 600 p.m. ( plus Rs.900 if Chauffeur is provided)

    • If any amount is recovered from employee is Not Deductible

2. When CC excees 1600 CC :

  • When Expenses on maintenance and running are met by the Employer ..

    • Perquisites Value is Rs. 2400 p.m. ( plus Rs.900 if Chauffeur is provided)

    • If any amount is recovered from employee is Not Deductible

  • When Expenses on maintenance and running are met by the Employee ..

    • Perquisites Value is Rs. 900 p.m. ( plus Rs.900 if Chauffeur is provided)

    • If any amount is recovered from employee is Not Deductible

2. When the Motor Car is Owned by the Employee

1. When Expenses on maintenance and running are met by the Employee ..

  • Perquisites Value is NIL

2. When Expenses on maintenance and running are Met or Reimbursed by the Employer ..

(A) Motor Car is used wholly and exclusively in the performance of Official Duties :

  • When the CC is less than / or more than 1600 CC : -
    • Perquisites Value is NIL

(B) Motor Car is used Partly in the performance of Official Duties and Partly for Private / Personal purposes :

  • When the CC of Motor Car does not exceed 1600 CC :-

    • Perquisites value is Actual Expenditure incurred by the Employer as Reduced by the amount of Rs. 1800 p.m. plus (+) Rs.900 p.m. if chauffeur is provided Less amount recovered from the employee.

  • When the CC of Motor Car excees 1600 CC :-

    • Perquisites value is Actual Expenditure incurred by the Employer as Reduced by the amount of Rs. 2400 p.m. plus (+) Rs.900 p.m. if chauffeur is provided Less amount recovered from the employee.

(C) Motor Car is used exclusively for Private Purposes

  • When the CC is less than / or more than 1600 CC : -

    • Perquisites value is Actual Expenditure incurred by the Employer Less amount recovered from the employee.

3. Perquisites in case of Other Conveyance like Scooter, Motor Cycle etc. but not Motor Car

1. When Conveyance is provided and expenses are met by the Employer :

(A) Used exclusively for Official Purposes

  • Perquisites Value is Nil

(B) Used exclusively for Private Purposes

  • Perquisites value is actual amount spent by the employer on running & maintenance and normal wear and tear of the vehicle.

(C) Used partly for Official and partly for Private Purposes

  • Reasonable proportion of expenses on running and maintenance and normal wear and tear attributable to private use.

2. When Conveyance is owned by the employee and expenses are met by the Employer

(A) Used exclusively for Official Purposes

  • Perquisites value is Nil

(B) Used Partly for Official and Partly for Private Purposes

  • Perquisites value is acutal expenditure incurred by the Employer as reduced by Rs.900 p.m. or such higher sum as certified by Employer and reduced by the amount recovered from the employee.

(C) Used exclusively for Private purposes

  • Perquisites value is actual amount spent by the employer

Documentation, a must:—

Specified documentation is required to be maintained when the Conveyance is used either wholly or partly in the performance of the official duties.

  1. The Employer has maintained the records pertaining to the details of journey such as date ofjoumey, destination, mileage, amount of expenditure incurred.

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

Notes :

  1. When the employer recovers any amount from the employee, such amount shall be reduced from the Perquisite value arrived as above except specifically prohibited as stated.

  2. When the conveyance is owned by the employee, he can claim inore than the eligible expenditure specified under the respective categories subject to maintenance of Documentation as a proof thereof.

  3. When the employer provides two cars to the employee, the perquisite value of one car shall be calculated as if the same has been used exclusively for private purposes.

Contents : Salary Income

 Important Links....for calculating Salary Income

(A). Salary -Definition & Meaning
(B). Provident Fund
(C). Allowance
(D). Perquisites
(E). Profit in lieu of Salaly
(F). Retirement Benefits
(G). Deductions
(H). Table Presentation of Salary Income (Section 15 to 17)
 
 
 
 
Get.. Tally.ERP9 Book + GST Practical Assignment @ Rs.550 Tally.ERP9 Book Online Order Tally.ERP9 Book Content
 
© 2018 : IncomeTaxManagement.Com