Tax implication on car usage

Tax queries 1458 views 2 replies

Hello All,

One of our Director's has a car gifted to him by his father. The car is registered in his father's business name in a different state (Tamil Nadu). The Director uses the car for both business and personal use. During business trips he pays for fuel and toll. Can he now claim the fuel expense and toll fees back from the company through an expense claim along with fuel and toll receipts? Will the expense payments to the employee be subject to any fringe benefits or other income tax? Ours is a private limited company based in Karnataka.

Thanks for your help

Replies (2)

1.Director has to pay Income Tax on (Fair Market of Car - Rs.50K) in case gift is made after 1-9-2010.

2.He can claim Fuel reimbursement/toll on production of bills.

3.There will be nil tax on company as well as director for such expense reimbursement subject to section 40A(3) limits on cash payment.

1.Director has to pay Income Tax on (Fair Market of Car - Rs.50K) in case gift is made after 1-9-2010.

Pls read the above sentence as follows:

1.Director has to pay Income Tax on (Fair Market Value of Car on the date of gift - Rs.50K) in case gift is made on or after 1-10-2009


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