07 June 2010
To claim tax benefits, some of our employees are opting for Car hire charges. There is agreement between our company and car owner. This amount will be deducted from the employee salary and it will be paid to car owner after deducting the TDS. Is this correct way of doing? Any company follows this?
07 June 2010
My view, Your practice is correct only, since the hiring between car owner and company the payment to be made to the car owner and it is for employees and can be reduced from salary if it is company policy
07 June 2010
The car hire charges paid to contractor would be tax free in the hands of employees only if the said car is used for official purpose. Otherwise the full or part would be taxable perquisite as per valuation rules.
CAclubindia
