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motor car expense

renuka kadge (CA Final Student) (148 Points)

01 April 2009

when the Co. is paying to the Empee the motor car reimbursement expense then what is the tax liability for the Employee & employer??? And whether motor expense will be regarded has perquites in the employee hand & he can claim exemption till Rs.1600pm.

kindly reply (renu.kadge @ gmail.com)

Thks

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Juzer Sadikot (CA - innovative solutions for Imports and Exports) (1309 Points)
Replied 01 April 2009

Dear Ms. Renu,

If employer being person other than individual(prop) has provided with moter car and re-imbersing the moter car expenses then employer is liable to pay FBT. No tax on employee.

If fixed motor car allowances are paid on monthly basis or otherwise then it will be taxed in the hands of employees and no FBT is require to pay on such expenses as per Section 115WB(2).