16 June 2011
Dear all, My company is providing motor - car facility by purchasing cars from the market and providing the same to its top employee for which the terms are as follows:- 1. Employee is required to pay 25 percent of the initial cost of car 2. There is condition that after 4 year employee is required to purchase the car at the wdv value in books of accounts
My question for the same is:- 1. Whether initial amount received from employee at the time of purchase of car is taxable in the hands of employer? 2. Since the car is purchasd for sale after 4 years to employee whether company can claim depreciation on this car? 3. What is the impact in books of account after 4 years when the car is sold to employees?
17 June 2011
1. ACTUAL COST FOR DEP PURPOSES WILL BE REDUCED BY THE SUM POAID BY THE EMPLOYEE 2. YES THE CO IS OWNER OF THE CAR 3. SINCE CAR IS SOLD AT WDV NO CAP GAIN WILL ARISE
CAclubindia
