Car running reimbursement

This query is : Resolved

CHANDRAMOHAN (Querist)
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07 June 2022 One of the salary component generally provided by company is car running reimbursement. Deduction to the extent of 180000 claimed by employee if they maintain the supportings.

It would be helpful if any one provide the basis on which 180000 comes to

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 The tax exemption limit under Section 10(14) of the Income Tax Act, 1961 in India allows for tax-free reimbursement for expenses incurred on official duties, including car running and maintenance. The current provisions allow up to ₹1,800 per month or ₹21,600 per annum for car running and maintenance expenses. Employers often provide this reimbursement to employees for using their own cars for official purposes. To claim the exemption, employees must maintain detailed records and submit bills or supporting documents. Any amount reimbursed above ₹1,800 per month (or ₹21,600 annually) may be taxable as perquisites in the hands of the employee and subject to income tax.