LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Car maintenance and Fuel reimbursement

Diva (Manager) (35 Points)

31 January 2010

What are the new rules? I have personal car with driver but its in my home town with my Father. Car is in my name and I bear all the expenses. Its engine capacity 1600 cc. Can I claim it? Also can I claim for money for say Jan if there are no bills for Dec?

Reply
Follow
Share

6 Replies

Amir (Learner) (4016 Points)
Replied 31 January 2010

Dear Diva,

Since Car is at different place from where u r working..& that too with ur Father....

Therefore it cannot be said to be used for official purposes..

I:e In the eyes of Income Tax, it will be treated as used exclusively for "PERSONAL PURPOSES"..

If u claim any expenses on account of this car from ur employer then the entire amount will be taxable in ur hands as perquisites..

Rahul Bansal (Finalist) (35929 Points)
Replied 31 January 2010

THANKS AMIR

Diva (Manager) (35 Points)
Replied 31 January 2010

Thanks Amir. I agree its for personal use and it will be part of perquisite. But is there any exemption allowed? I read somewhere Car maintenance and Fuel reimbursement. This element is taxable now. The exemption is limited to Rs 1,800 per month (engine capacity <= 1600cc) and Rs 2,400 per month (engine capacity > 1600cc). Any amount over and above the exemptions is fully taxable. Driver’s salary reimbursement. This element is taxable now. The exemption is limited to Rs 900 per month. Rest of the reimbursement amount will not be treated as a perquisite and hence will not attract additional tax.

Amir (Learner) (4016 Points)
Replied 31 January 2010

Dear Diva, What u r saying about the limit of Rs.900 or Rs. 1,800 is applicable where Car is used for Partly offical & partly personal purposes... As i mentioned in the present case it cannot be said that u r using the car partly for official & partly for personal purposes.