If a car loan from employer forms part of the flexi kitty, will it be taxable salary in the hands of the employee? Please guide me. Many thanks! Venkatesh N Manager- HR
From India, Trichy
From India, Trichy
No, it is not taxable at the hands of employees if company is paying EMI and the same is deducted in Employees CTC. Pon
From India, Lucknow
604From India, Lucknow
Hi,
You need to refer Income Tax Act for the same please refer
Income Tax India
The thumb rule in your above case should be: If the car EMI is not part of the CTC and not for the purpose of personal use, registered in the company name and being used for official purpose only (at least on paper) and registered in company's name then there will be no income tax applicable.
Regards
Govind
From India, Mumbai
You need to refer Income Tax Act for the same please refer
Income Tax India
The thumb rule in your above case should be: If the car EMI is not part of the CTC and not for the purpose of personal use, registered in the company name and being used for official purpose only (at least on paper) and registered in company's name then there will be no income tax applicable.
Regards
Govind
From India, Mumbai
Thank you sir. The purpose is to peel off this component from taxable salary, could the employer himself extend this loan to the employee, wherein the vehicle is hypothecated to the employer till completion of loan amount, deduct the loan emi from monthly salary?
Please clarify.
Many thanks
venkatesh n
From India, Trichy
Please clarify.
Many thanks
venkatesh n
From India, Trichy
It is car scheme offered by the employer. The vehicle will be in the name of employer. After the EMIs, the car is transferred to employees at a nominal cost or without cost as per company policies. But the car shall be used for official purposes during EMI period.
Pon
From India, Lucknow
Pon
From India, Lucknow
Hi, You just keep in mind that the car for which your organisation is paying EMI should be registered in company name
From India, Mumbai
From India, Mumbai
W.e.f. 1-4-2008, if an employer providing such by the employer facility to his employee is not liable to pay fringe benefit tax, the value of such perquisite shall be :
a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties.
b) Actual expenditure incurred by the employer on the running and maintenance of motor car including remuneration to chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use (in case the motor car is exclusively for private or personal purposes of the employee or any member of his household).
c) Rs. 1200-(plus Rs. 600-, if chauffeur is also provided) per month (in case the motor car is used partly in performance of duties and partly
for private or personal purposes of the employee or any member of his household if the expenses on maintenance and running of motor car are met or reimbursed by the employer). However, the value of perquisite will be Rs. 1600-(plus Rs. 600-, if chauffeur is also provided) per month if the cubic capacity
of engine of the motor car exceeds 1.6 litres.
d) Rs. 400- (plus Rs. 600-, if chauffeur is also provided) per month (In case the motor car is used partly in performance of duties and partly for private or personal purposes of the employee or any member of his household if the expenses on maintenance and running of motar car for such private or personal use are fully met by the employee). However, the value of perquisite will be Rs. 600- (plus Rs. 600-, if chauffeur is also provided) per month if the cubic capacity of engine of the motor car exceeds 1.6 litres. If the motor car or any other automotive conveyance is owned by the employee but the actual running and maintenance charges are met or reimbursed by the employer, the method of valuation of perquisite value is different. (See Rule 3(2)).
From India, Ahmadabad
a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties.
b) Actual expenditure incurred by the employer on the running and maintenance of motor car including remuneration to chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use (in case the motor car is exclusively for private or personal purposes of the employee or any member of his household).
c) Rs. 1200-(plus Rs. 600-, if chauffeur is also provided) per month (in case the motor car is used partly in performance of duties and partly
for private or personal purposes of the employee or any member of his household if the expenses on maintenance and running of motor car are met or reimbursed by the employer). However, the value of perquisite will be Rs. 1600-(plus Rs. 600-, if chauffeur is also provided) per month if the cubic capacity
of engine of the motor car exceeds 1.6 litres.
d) Rs. 400- (plus Rs. 600-, if chauffeur is also provided) per month (In case the motor car is used partly in performance of duties and partly for private or personal purposes of the employee or any member of his household if the expenses on maintenance and running of motar car for such private or personal use are fully met by the employee). However, the value of perquisite will be Rs. 600- (plus Rs. 600-, if chauffeur is also provided) per month if the cubic capacity of engine of the motor car exceeds 1.6 litres. If the motor car or any other automotive conveyance is owned by the employee but the actual running and maintenance charges are met or reimbursed by the employer, the method of valuation of perquisite value is different. (See Rule 3(2)).
From India, Ahmadabad
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Company Car Policy.doc
CAR LEASE POLICY.pdf