Want to know about if we as company are giving petrol reimbursement to our employees and driver salary for their car, it will attract any TDS under perquisite or not. Car is owned by employees and he is claiming as expenses
04 March 2013
we want to use this component in salary structure to save tax on employees hand, so please guide me if we goes to show it as reimbursement and collect bills and voucher from employees every month then what will be treatment for the same
Your intention to use this component in salary structure to save tax in employee’s hand, on other hand you are saying that reimbursement is only for official job.
How can you include this in salary structure and have employees accepted this scheme, they are not deriving any benefit and just getting reimbursement of official expenses incurred.
Please note tax treatment is different if car is used for Both official and private purpose
05 March 2013
In your case Car is owned by employees and is used both for official and private purpose.
Yes it is taxable as perquisites and the perquisite value would be as under
1)If employee has small car: Amount reimbursed minus Rs.1800 per month minus Rs. 900 for Driver. Suppose employee has been reimbursed 5000 per month including driver salary, taxable value would be 5000-1800-900=2300 per month.
2)If employee owns big Car (cubic capacity >1600cc): Amount reimbursed minus Rs.2400 minus 900 for driver. i.e. 5000-2400-900=1700. Per month.
Tax treatment is different and more beneficial for employee if car is owned by the Employer.
05 March 2013
one more question please if we shows car taken on hire with driver and petrol for employees for office use and company paid directly to other person then it will be covered under perquisite or not
Car Hire Charges - 25000/- with Driver & Petrol TDS Contractor - 2% on vendor
Then Pls advice it would be taxable in employees hand or not
CAclubindia
