BLOG on Income Tax Management for - AY 2022-23 & 2023-24

"How An Employee Can Get Tax-Free Car For Personal Use"

In the case of ordinary employees who are not directors of the company or who are not substantial shareholders, a special benefit is available in the matter of valuation of the perquisite.

Thus, where any benefit or amenity is provided in kind and where the monetary emoluments of such employee do not exceed 50,000 for the relevant financial year, the value of such benefit or amenity in kind, including the value of motorcar or any other conveyance provided free of charge to the employee, for the personal purposes of such employee, is NIL . The value of the perquisite in such cases is not to be added to the total income of the employee for income tax purposes.

This means that if an employee were to plan this perquisite properly, in various circumstances, he would be able to get the enjoyment of this perquisite completely free of income tax.

Where an ordinary male employee is employed at a salary which does not exceed ‘ 50,000 per annum and is given an option of a free motorcar for personal use or an additional cash allowance by way of additional remuneration which goes to make the salary higher than ‘ 50,000 per annum, he can easily opt for a free motorcar which would be considered as a tax-free perquisite in his hands as per the definition of the expression “perquisite” contained in Section 17 (2) (iii) of the Income Tax Act.

"How An Employee Can Get Tax-Free Car For Personal Use"

Related Topics .... Salary-Perquisites

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