accounting entries

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2010 if an employee is given a car by the company which has been bought in the name of the employee but the EMI for the same is paid by the company then can the car be treated as a company asset.
Pl advise how this transaction should be accounted in the company books and the income tax implication for the individual and company

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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30 June 2010 Since the Car registration in the name of the employee, you cannot take it as asset, you need to add & debit to the employee perqusites and taxed accordingly,

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CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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01 July 2010 Agreed with Mr. Ramesh, Company can't book car in its books. Payment of EMI per month will be treated as perquisites given to employee and taxable in hands of employee

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Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2010 Thank you for your prompt response.Can you advise what procedure the company should follow so that the employee could avail the max tax benefit with respect to the car?

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