80-IAC Motor Vehicle cost < 10 Lakh

This query is : Resolved

IT Consultant (Querist)
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23 October 2023 We are IT startup registered under DPIIT and have already taken tax (MAT) benefits since last 2 years. We are a non-funded company. So are we ELIGIBLE to buy a motor vehicle (CAR) above Rs.10 lakh for the company Directors?

80-IAC - Section 56 (2)(viib) states that tax exemption is application if "(f) a motor vehicle, aircraft, yacht or any other mode of transport, the actual cost of which exceeds ten lakh rupees, other than that held by the Startup for the purpose of plying, hiring, leasing or as stock-in-trade, in the ordinary course of business"

I think this rule of below Rs. 10 lakh motor vehicle applies to startup who have taken funding or issued premium shares. Or should we wait to provide car above 10 lakh after 3 years of tax benefits? Please provide clarification on this.

Thanks.