19 February 2010
In my company there are two cases: 1. The motor car is company owned and the employees are given per month entitlement for running and mtce of the car. Besides, they are also paid for hiring the driver. Say, the entitlement is Rs.7000 p.m. and for driver's salary it is Rs.4500 p.m. How the valuation will be made for car. Is the driver's salary entitlement to be included in full in the employee's income?
2. The motor car is employee owned and running & mtce expenses and driver's salary is also paid from company. Say, entitlement Rs.7000 and for driver's salry it is Rs.4500p.m. How the income of employee would be calculated?
19 February 2010
1) If motor-car company owned and only Expenses paid by employer not Driver's salary and car used for official & private use then in this case amount will be taxable Rs. 1800 PM(if upto 1.6 litre) or Rs. 2400 PM(If car is greater than 1.6 litre)
2) If motor-car owned by employee and all expenses paid by employee then amount will be taxable as follow: a) If car upto 1.6 litre = Exp. paid by employer - Rs. 1800 + Rs. 900 b) If car exceeds 1.6 litre = Exp. paid by employer - Rs. 2400 + Rs. 900
*Please Note: Above given amount can be changed provided if employee provides proper log-book certifiied by the employoer and A certificate from employoer.
19 February 2010
But in case (2), the emplyee will be at loss coz his taxability will get increased even if he is using his own car. And in absolute terms, what would be the amount taxable if the total running & mtce expenses provided by employer which is equal to Rs.14000. Would it be Rs.11300 p.m.
CAclubindia
