Car to employees

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This query is : Resolved

Jayesh Jagetiya (Querist)

22 November 2008 Our company have given the Car to employees for to & fro (home to office) & for use for office purpose. All the expences like petrol & maintenence are born by our comapany only drivers salary is to be borne by the employee. Whether we have to include this in his salary? if yes then what amount? Whether FBT provision applicable on that?

Ravikumar.G

Ravikumar.G (Expert)

22 November 2008 Taxability of perquisites provided by employees who are not subject to FBT is described under Rule 3(2)(A) which is a elaborate one. Go thro' Rule 3(2)(A).
Fully official use : Not a perquisite provided the documents specified in Rule 3(2)(B) are maintained.

i.e 1) Employer should maintain complete details of journery undertaken for official purpose, which includes date of journey, destination, mileage and amount of expenditure incurred thereon.

2) Certificate of supervising authority of the employee, wherever applicable, to the effect that the expenditure was incurred for wholly and exclusively for performance of official duties, should be provided.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

22 November 2008 As per explanation to section 17(2)(iii) employer's vehicle for journey by employee from his residence to his office or other place of work/vice versa will not be regarded as benefit or amenity granted free of cost or at concessional rate to employee. Therefore the facility is not a perquisite and need not be included in salary.

As per section 115 WB(2)(H)repair, running, maintenance of motor cars and the amount of depreciation thereon attracts FBT. Therefore, your case squarely cover FBT provisions.

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