Perquiste computation
This query is : Resolved
Vasudeva Rao
(Querist)
01 February 2012
As per revised Income Tax rules in 2009, if Employer sells the company used Car "at a nominal price" to Employee, then there is perquisite value computation viz.20% per completed year depreciation minus price collected by employee is taxable perquisite value.
Can you please provide me the expert advice, if the Employer sells the company used Car to Employee at "market value" as determined by the authorised Car dealers of the said car, whether Perquisite value will computed as above.
Mr. Vivek Mehta's response, appears to be without considering the fact that, the Car was sold at "Market Price" not at "nominal price". I am looking for "applicability of this provision if the Car is sold at "Market value"
Can you please provide me the expert advice, if the Employer sells the company used Car to Employee at "market value" as determined by the authorised Car dealers of the said car, whether Perquisite value will computed as above.
Mr. Vivek Mehta's response, appears to be without considering the fact that, the Car was sold at "Market Price" not at "nominal price". I am looking for "applicability of this provision if the Car is sold at "Market value"
01 February 2012
Yes as per income tax act and as per perquisite valuation rule there is no way where the things can't be left...the difference will always be chargalbe to tax and valuation shall be done as per given rules only...
CA SUMiT PATWARi
(Expert)
01 February 2012
No in such a situation, there is no question of any perquisite.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
CA SUMiT PATWARi
(Expert)
01 February 2012
No in such a situation, there is no question of any perquisite.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
However proper documentation should be there suggesting that proper quotations/prices from uncontrolled market were referred to, while deciding the transfer price.
The above provision was brought in because the companies have a policy to give used cars to employees, say after 3 years of use at a nominal price (say 10,000). In such situation perquisite arises.
However, when there is no real intention to offer any benefit to employees, the provisions should not get attracted.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST on reimbursement of expenses
- Query on effect of registration of property
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Visiting card purchase
- Equity Share Sale and Purchase
- Additional trade name
- Whether output tax is taken credit by purchaser
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Wrong CMPo8 file
- Number of years as per AS amortisation of Goodwill
- Foriegn assets disclosure
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
