Tax Query

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Dear Freinds, Its urgent In a company Salary is given under the Head as Car Fuel , Car Driver, Car Maintenance &Insurance, Residence Telephone, Mobile expenses as Fixed component and also on Actual bills, employee to employee it differs.Earlier company gives FBT on it. My Question is that:- 1.As it is a Fixed part in salary should it be treated as allowance or perquisites? 2.If it is allowance then these are fully taxable? 3.Can it be treated as perquisites as company takes the Bill against each expenses as reimbursement tough it is a part of Salary is it applicable as per IT Act? 4. What is taxability of these components now after NOTIFICATION as on18 December,2009? Plz reply urgently.
Replies (1)

Dear Pramod,

case 1 CAR IS USED FOR OFFICIAL PURPOSES ONLY

                      - Nothing will be taxable

case 2 CAR IS USED FOR PERSONAL PURPOSES ONLY

            A) CAR IS OWNED/HIRED BY EMPLOYER

                       - Actual Exp. i:e 8,000 + 12,000 will be taxable +

                      - 10% of cost of car (if owned) or Actual hire charges paid be employer will be tabxable

             B) CAR IS OWNED BY EMPLOYEE

                              - Actual Exp i"e 8,000 +12,000 will be taxable

3) CAR IS USED FOR PARTLY OFFICIAL & PARTLY PERSONAL PURPOSES

             A) CAR IS OWNED/HIRED BY EMPLOYER

                     - BIg Car(exceeding 1600 CC) then 2,400/month will be taxable

                       - Small Car (less than 1600 CC) then 1800/month will be taxabl

                       - Driver;s Salary  - Rs. 900/month will be taxable

           B) CAR IS OWNED BY EMPLOYEE

                     ACTUAL EXPENDITURE (I:E Rs. 8,000+ 12,000) LESS LIMITS  SPECIFIED IN 3(A) ABOVE WILL BE TAXABLE

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