Income tax Query
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
18 September 2010
1) perquisite on motor car. If the Motor car is owned by employer and
running and maintenance cost is borne by employee. Then what about the
Conveyance allowance or transport allowance under section 10 800/- p.m. The conveyance allowance is given in salary package.
2) Payment of freight to Non resident non shipping company by resident
indian tds applicability. under what section
3) TDS on Director sitting fee ( Board Meeting)
4) proof for LTA/LTC necessary.
Thanks
running and maintenance cost is borne by employee. Then what about the
Conveyance allowance or transport allowance under section 10 800/- p.m. The conveyance allowance is given in salary package.
2) Payment of freight to Non resident non shipping company by resident
indian tds applicability. under what section
3) TDS on Director sitting fee ( Board Meeting)
4) proof for LTA/LTC necessary.
Thanks
18 September 2010
1. Transport allowance will be allowed Rs.800 per month
2.yes. TDS applicable
3. TDS not applicable
4.Even though the judgements are there for documents not required, as employer point of view, it is required to calculate the correct TDS
2.yes. TDS applicable
3. TDS not applicable
4.Even though the judgements are there for documents not required, as employer point of view, it is required to calculate the correct TDS
Message likes :
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18 September 2010
agreed with Mr. Ramesh
As per my opinion there will be add perquisite for use of asset of company
Use of assets - It is common practice for an asset owned by the employer to be used by the employee or any member of his household. This perquisite is to be charged at the rate of 10% of the original cost of the asset as reduced by any charges recovered from the employee for such use. However, the use of Computers and Laptops would not give rise to any perquisite.
As per my opinion there will be add perquisite for use of asset of company
Use of assets - It is common practice for an asset owned by the employer to be used by the employee or any member of his household. This perquisite is to be charged at the rate of 10% of the original cost of the asset as reduced by any charges recovered from the employee for such use. However, the use of Computers and Laptops would not give rise to any perquisite.
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 September 2010
1) perquisite on motor car. If the Motor car is owned by employer and
running and maintenance cost is borne by employee. Then what about the
Conveyance allowance or transport allowance under section 10 800/- p.m. if the conveyance allowance is given in salary package.
2) Payment of freight to Non resident non shipping company by resident
indian tds applicability. under what section
3) TDS on Director sitting fee ( Board Meeting)
4) proof for LTA/LTC necessary.
running and maintenance cost is borne by employee. Then what about the
Conveyance allowance or transport allowance under section 10 800/- p.m. if the conveyance allowance is given in salary package.
2) Payment of freight to Non resident non shipping company by resident
indian tds applicability. under what section
3) TDS on Director sitting fee ( Board Meeting)
4) proof for LTA/LTC necessary.
31 July 2024
Here’s a detailed response to your queries regarding perquisites, TDS on payments, and proof requirements for LTA/LTC:
### 1. Perquisite on Motor Car
**If the motor car is owned by the employer and the running and maintenance costs are borne by the employee:**
- **Perquisite Calculation:**
- If the motor car is owned by the employer and the running and maintenance costs are borne by the employee, the car is considered a perquisite in the hands of the employee.
- The perquisite value is determined based on the engine capacity of the car and whether the car is used for official purposes or personal purposes.
**Conveyance Allowance or Transport Allowance under Section 10(14):**
- **Conveyance Allowance (₹800 p.m.)**: This allowance is exempt from tax up to ₹800 per month under Section 10(14) of the Income Tax Act if it is used for commuting between the place of residence and place of work.
- **Impact on Taxable Perquisite**: If the employer provides a motor car as a perquisite and the employee bears the running and maintenance costs, the perquisite value of the car will still be computed. The conveyance allowance under Section 10(14) will be exempt to the extent of ₹800 per month, but this exemption does not affect the perquisite value of the car.
### 2. Payment of Freight to Non-Resident Non-Shipping Company
**TDS Applicability:**
- **Section 195**: Payments to non-residents, including freight payments to a non-resident non-shipping company, are subject to TDS under Section 195 of the Income Tax Act.
- **Rate of TDS**: The TDS rate depends on the nature of the payment and the provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the non-resident. If there is no DTAA, the domestic TDS rate for the relevant category of payment will apply.
### 3. TDS on Director Sitting Fee
**TDS Applicability:**
- **Section 194J**: TDS on sitting fees paid to directors for attending board meetings is covered under Section 194J.
- **Rate of TDS**: The TDS rate is 10% on sitting fees.
### 4. Proof for LTA/LTC
**Proof Required for LTA/LTC Claim:**
- **Travel Tickets**: Original tickets of the journey undertaken should be kept as proof.
- **Boarding Passes**: If traveling by air, boarding passes should be kept.
- **Invoices/Receipts**: For travel expenses, maintain invoices or receipts if applicable.
- **Travel Itinerary**: Itinerary detailing the places visited can be useful.
- **Travel Certificate**: If travel is by any other mode, a certificate from the transport provider may be necessary.
**Note:** Ensure to retain all supporting documents related to LTA/LTC claims as the Income Tax Department may request these during assessments.
### 1. Perquisite on Motor Car
**If the motor car is owned by the employer and the running and maintenance costs are borne by the employee:**
- **Perquisite Calculation:**
- If the motor car is owned by the employer and the running and maintenance costs are borne by the employee, the car is considered a perquisite in the hands of the employee.
- The perquisite value is determined based on the engine capacity of the car and whether the car is used for official purposes or personal purposes.
**Conveyance Allowance or Transport Allowance under Section 10(14):**
- **Conveyance Allowance (₹800 p.m.)**: This allowance is exempt from tax up to ₹800 per month under Section 10(14) of the Income Tax Act if it is used for commuting between the place of residence and place of work.
- **Impact on Taxable Perquisite**: If the employer provides a motor car as a perquisite and the employee bears the running and maintenance costs, the perquisite value of the car will still be computed. The conveyance allowance under Section 10(14) will be exempt to the extent of ₹800 per month, but this exemption does not affect the perquisite value of the car.
### 2. Payment of Freight to Non-Resident Non-Shipping Company
**TDS Applicability:**
- **Section 195**: Payments to non-residents, including freight payments to a non-resident non-shipping company, are subject to TDS under Section 195 of the Income Tax Act.
- **Rate of TDS**: The TDS rate depends on the nature of the payment and the provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the non-resident. If there is no DTAA, the domestic TDS rate for the relevant category of payment will apply.
### 3. TDS on Director Sitting Fee
**TDS Applicability:**
- **Section 194J**: TDS on sitting fees paid to directors for attending board meetings is covered under Section 194J.
- **Rate of TDS**: The TDS rate is 10% on sitting fees.
### 4. Proof for LTA/LTC
**Proof Required for LTA/LTC Claim:**
- **Travel Tickets**: Original tickets of the journey undertaken should be kept as proof.
- **Boarding Passes**: If traveling by air, boarding passes should be kept.
- **Invoices/Receipts**: For travel expenses, maintain invoices or receipts if applicable.
- **Travel Itinerary**: Itinerary detailing the places visited can be useful.
- **Travel Certificate**: If travel is by any other mode, a certificate from the transport provider may be necessary.
**Note:** Ensure to retain all supporting documents related to LTA/LTC claims as the Income Tax Department may request these during assessments.
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