Urgent Clarification of FBT required ?

This query is : Open

CMA. Subhash Kumar Jha (Querist)
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12 December 2008 Sir,

I am confused. Yesterday i got two opinion stating Driver's salary should be included in vehicle running & maint exp.

Please refer to "CIRCULAR No. 8/2005, dt 29/8/05 of Fin Act, 2005.

Point No. 78

Reimbursement in respect of car exp on the basis of bills submitted & driver's salary on the basis of declaration :

such reimbursement is effectively exp of employers for the purpose ofconveyance, tour & travel covered in clause (F). SO IT IS A CONVEYANCE EXP.

Point No. 87

Salary paid to driver of a motor car :
is a vehicle running & maint exp.

THE ABOVE TWO POINTS ARE CONTRADICTORY.

CAN U URGENTLY CLARIFY.

WHAT IS THE CORRECT TREATMENT?

Thanks

Subhash

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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12 December 2008 Please read this as:

When there is reimbursement of conveyance expenses then it is clear that the vehicle is not owned by the employer. So here is salary paid to driver by the employee.

On the other hand "Salary paid to the driver of a motor car - is a vehicle running & maintt. expenses" means that vehicle is owned by the employer and driver is also his employee.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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12 December 2008 Now I think you can make difference between the two.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Querist)
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15 December 2008 But Sir,

In our case, the vehicle is owned by the employer & employee is using it for office purposes.

Employee is using his personal driver for this & claiming reimbursement from the employer for the driver's salary.

Now tell me how should i take it.

Thanks & Regards,

Subhash Jha

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