Perquiste computation
This query is : Resolved
01 February 2012
As per revised Income Tax rules in 2009, if Employer sells the company used Car "at a nominal price" to Employee, then there is perquisite value computation viz.20% per completed year depreciation minus price collected by employee is taxable perquisite value.
Can you please provide me the expert advice, if the Employer sells the company used Car to Employee at "market value" as determined by the authorised Car dealers of the said car, whether Perquisite value will computed as above.
Mr. Vivek Mehta's response, appears to be without considering the fact that, the Car was sold at "Market Price" not at "nominal price". I am looking for "applicability of this provision if the Car is sold at "Market value"
Can you please provide me the expert advice, if the Employer sells the company used Car to Employee at "market value" as determined by the authorised Car dealers of the said car, whether Perquisite value will computed as above.
Mr. Vivek Mehta's response, appears to be without considering the fact that, the Car was sold at "Market Price" not at "nominal price". I am looking for "applicability of this provision if the Car is sold at "Market value"
01 February 2012
Yes as per income tax act and as per perquisite valuation rule there is no way where the things can't be left...the difference will always be chargalbe to tax and valuation shall be done as per given rules only...
01 February 2012
No in such a situation, there is no question of any perquisite.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
01 February 2012
No in such a situation, there is no question of any perquisite.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
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