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Taxabillity of Transport facility

Benny Thadathil (CDM) (317 Points)

23 January 2010

If an employer provides free transporatation to its employees, is this to be considered as a taxable perquisite?

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14 Replies

Kashyap Joshi (Proprietor ) (260 Points)
Replied 23 January 2010

1) If the transportation facility is provided for daily commuting for official purposes, then it is excempted u/s. 10(14) to the extent of

a) Rs. 800 /- p.m. and

b) Rs. 1600 /- in case of employee is blind or orthopadically handicapped.

2) If the employee is working for a trasport system and he gets the amount for personal expenses during the course of running of such transport (vehicle), then it is excempted lower of :-

a) 70 % of such allowance or

b) Rs. 6000 /-. p.m.

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Kashyap Joshi (Proprietor ) (260 Points)
Replied 23 January 2010

As far as perquisites are concerned:-

a) it is excempt fully to employees of railways and airlines.

b) In case of employess other than (a) but only transport undertaking, perquisite is valued as follows :-

i) Find out cost to employer xx

ii) Recovery from employee (x)

iii) Balance amount Taxable xxx (if positive)

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swajitha (ca..final) (68 Points)
Replied 23 January 2010

but those provisions are applicable for transport allowance and not in this case....

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swajitha (ca..final) (68 Points)
Replied 23 January 2010

if conveyance is provided to go to office from home and to return to home from office then it is not a taxable perquisite as it is used for official purposes...i hope mr.benny is talking about tat kind of transportation facility

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Benny Thadathil (CDM) (317 Points)
Replied 23 January 2010

Originally posted by : swajitha

Thank you, my query was about transportation provided to the emoployees travel in between office and home.

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Shudhanshu Agrawal (Business) (2570 Points)
Replied 23 January 2010

Originally posted by : Benny Thadathil
	If an employer provides free transporatation to its employees, is this to be considered as a taxable perquisite?

When there is a facility of transportation comes it goes under perquisites and in case of perqusites valuation is as follows:

1. Employees of railway/airlines NIL

2. Employees of any other undertaking

Value at which such benefit is offered by the employer to the public xxx

Less: Amount recovered from employee (xxx)

Balance is Taxable xxx

But if you are talking of Transport Allowances(part of salary) then its different they will be exempted upto 800 pm or 1600 pm (physically chalenged). Balance will be taxable.

Shudhanshu Agrawal (Business) (2570 Points)
Replied 23 January 2010

Originally posted by : swajitha
	if conveyance is provided to go to office from home and to return to home from office then it is not a taxable perquisite as it is used for official purposes...i hope mr.benny is talking about tat kind of transportation facility

Dear Swajitha,

Dont you think if transport facility is not taxable then it will become a point for tax planning??? and u can pay any amount under this and will not be taxable??...and pls mention in which section it is not taxable??

Thanks

Benny Thadathil (CDM) (317 Points)
Replied 23 January 2010

Originally posted by : Shudhanshu

Originally posted by : swajitha

if conveyance is provided to go to office from home and to return to home from office then it is not a taxable perquisite as it is used for official purposes...i hope mr.benny is talking about tat kind of transportation facility

Dear Swajitha,
Dont you think if transport facility is not taxable then it will become a point for tax planning??? and u can pay any amount under this and will not be taxable??...and pls mention in which section it is not taxable??
Thanks

Dear Shudhanshu, Let me clarify. My query was related to the transportation facility ( not an allowance paid as part of salary)- Employer providing free transporation to the employees (as most of the BPOs and Call centeres do pick and drop).

Shudhanshu Agrawal (Business) (2570 Points)
Replied 23 January 2010

Sorry Mr. Benny and Swajitha,

My query is also solved and with this discussion i also got one more point.

Thanks.

manish (Article Assitant) (358 Points)
Replied 23 January 2010

In my opion, Mr. Benny this transporation is not include in the employee's income. it is an expenses made by the employer so employer can take deduction for this in the p&l A/c.

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RADHIKA JALAN (agarwal) (1521 Points)
Replied 23 January 2010

swajitha is right................

RADHIKA JALAN (agarwal) (1521 Points)
Replied 23 January 2010

swajitha is right................

J.K.Shahi (Service) (44 Points)
Replied 23 January 2010

Kindly refer Explanation to sec 17 (2) iii

[Explanation.—For the removal of doubts, it is hereby declared that the use of any vehicle provided by a company or an employer for journey by the assessee from his residence to his office or other place of work, or from such office or place to his residence, shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate for the purposes of this sub-clause;]