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Pls help valuation of motor car for the may 2010 exam pcc

Hitesh S Dholkiya (B.com, CA Final) (40 Points)

12 March 2010

Hello Friends

Pls any one tell me which rates of motorcar for the valuation are applicable for the may 2010 pcc exams ?

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CA. ANiRuDDhA RAthi (CA) (554 Points)
Replied 16 April 2010

Valuation of perquisite in respect of motor car:

Private purpose	Official Purpose	Private and official purpose
Car owned by the employee and expenses met by him
Not a perquisite	Not a perquisite	Not a perquisite
Car owned by the employee and expenses are reimbursed by the employer
Actual expenses of employer less: amount recovered from the employee balance amount will be perquisites in employee's hand	Not a perquisite(see Note-1)	1.calculate actual expenditure on by employer 2.less:if car hp < 16, perquisite is Rs.1200 1800p.m., if hp>16 Rs.1600 2400 p.m. with Rs.600 900 p.m. chauffeur salary. or higher sum as recorded by logbook by employer 3.Less :amount recovered from the employee (if any)
Car is owned/ hired by the employer and expenses met by the employer
1.Actual Expenses by employer 2. Plus depreciation (10% of the original cost of car)/ hire charges(if car is hired) 3.Less :amount recovered from the employee	Not a perquisite(see note-1)	if car hp < 16, perquisite is Rs. Rs.1200 1800p.m.., if hp>16 Rs.1600 2400 p.m. with 600 900 p.m. chauffeur salary. Note :nothing is deductible in respect of any amount recovered from employee.
Car is owned/ hired by the employer and expenses met by the employee
1.Depreciation(10 % of the original cost of the car)/ hire charges + chauffeur salary. 2,less : amount recovered from the employee	Not a perquisite(see note-1)	If car hp < 16, perquisite is Rs.400 600 p.m., if hp>16 Rs.600 900 p.m. with Rs.600 900 p.m.chauffeur salary. Note :nothing is deductible in respect of any amount recovered from employee.

Note 1. Conditions to be satisfied if the Car is used for official purpose :-

The employer has maintained complete details of journey undertaken for offcial purpose which may include date of journey, destination, mileage, and the amount of exepnditure incurred thereon.
The employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties
Content of log book - complete details of the journey such as date of journey destination, mileage and amount of the expenditure incurred.
The priciple of Arms length price will apply while cars taken from related parties.

Note:2: where more than one car is being provided for use for employee or member of his family then valuation will be as under

The only car will be valued as partly used for official purpose and partly for private purpose
other car will be valued as fully used for private purpose.

Note:3-Car facility between residence to office

Car facility between office to residence and back is not chargeable to tax at all.

Note-4: Vehicle other than Car owned by employee and running and maintenance met /reimbursed by employer

If used for official purpose: full exempt see note one
If used for private purpose: expense met by employer fully taxable as perquisites
Partly used for office: find out total expenses met by employer less 600 per month (or higher if actual recorded) for official purpose and less any amount recovered from employee balance amount will be treated as perquisite

Note-5: if in any case given above the amount is negative after recovery from the employee then valuation of perquisites will be treated as nil

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