Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Motor car expenses including driver salary reimbursement

Soumya (Senior Accounts Executive) (235 Points)

22 June 2016

Dear All,

Can any one suggest me on tax exemption on motor car expenses including driver salary provided to employees applicable or not.

I communicated with my CA they said it depend on company policy. Also said to exempt from tax there should be letter of company to employee for the same.

Please suggest whether it will be correct or wrong while in Auding.

Awaiting someone reply.

Reply
Follow
Share

2 Replies

CA Saurabh Singh (Practising Chartered ) (974 Points)
Replied 22 June 2016

Hi Soumya,

Motor car provided along with chaffuer is a perquisite u/s 17(2)(iii), and it is exempt Where maintenances and running expenses including remuneration of the chauffeur are met or reimbursed by the employer, provided if it is used wholly for offcial purpose.

Regards,

CA SAurabh SIngh,

7210864420

Upgrade to CAclubindia Pro. Subscribe Now!

CMA Poornima Madhava (CMA) (13112 Points)
Replied 22 June 2016

Further, where the car is owned by employee and expenses are met by the employer, if the car is used for private as well as official purpose, then Rs.1800 pm is exempt if car engine is of <=1600cc (or Rs.2400 pm if engine capacity is >1600cc). Also Rs.900 pm is exempt towards salary of driver if any.