02 June 2008
A company has purchased a car which is given to one of its employees for his exclusive use. Purchase price was paid directly to the dealer by the co. Car is registered in the name of the co. As agreed between the co and the employee, the co will recover the cost of the car over a period of 36 months in equal instalments without any interest. At the end of three years, the car will be transfered in the name of employee at Re 1/-. In this context I would like to know that whether the cost of the car which recovered by the co without any interest will be subject to perquisite valuation taxable in the hands of the employee?
In this case it is similar to that of company giving interest free Car loan to employee...So to value perquisite SBI rate of interest on similar Car loan is taken and calculated interest would be the value of perquisite taxable in the hands of employee....
CAclubindia
