Perquisites

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2011 Dear Sir,

In case of car perquisite valuation, if the car is owned by employee and used wholly for official purpose, there is no perquisite.

Now, if I incur say Rs. 50000/- during the month on petrol & maintenance and company pays me Rs. 36000/- as petrol and maintenance reimbursement and my usage of car for company purpose (in terms of value in kms calculated at average rate) is Rs. 40000/-, can I say that I have used company car fully for official purpose since, my expenses on car used for company purpose has exceeeded my allowance received from company.

Kindly advise at the earliest

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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09 June 2011 First of all, it is not prudent to use personal car for the purpose of company.
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According to prevailing practices in our country, we should try to use company's car for personal use and establish the same as if used for the company.
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For proving that the car has been used for official purpose according to the rules
the conditions required to be fulfilled are-
For the Employer :
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complete details to be maintained about journey undertaken- by including 4Ds-
Date, Destination, Distance and Dam i.e
expenditure incurred.
For the Employee:
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A certificate from company to the effect that expenditure was incurred wholly and exclusively for the performance of official duties.

SO, in spite of Average Expenditure /Km
basis, you should stick to the practice of actual expenditure incurred.

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