Direct & Indirect Taxes, Tax Ready Reckoner for AY 2022-23 & 2023-24
  • Home
  • Gross Total Income (GTI)
    • All
    • Business and Profession
    • House Property
    • Salaries
    [Section 28]-Chargiability-Scope-Meaning of Income

    [Section 28]- Chargeability/Scope/Meaning of Income – Profits and Gain of Business and Profession

    Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

    Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

    Section 36-Other Deductions -Profits and Gains of Business and Profession

    Section 36-Other Deductions -Profits and Gains of Business and Profession.

    General Deductions [Section 37(1)]

    General Deductions [Section 37(1)] -Profits and Gains of Business or Profession

    Section 40A-Expenses or Payments Not Deductible

    Expenses or Payments Not Deductible: [Section 40A] -Profits and Gains of Business or Profession

    Section 43B-Deductions Allowed only on Actual Payment

    Section 43B-Expenses Allowed only on Actual Payment -Profits and Gains of Business and Profession

    Trending Tags

    • Gross Total Income (GTI)
    • Perquisites
    • Allowances
  • Amendments Bill 2022
    Amendments relating to Penalties and Prosecutions by the Finance Bill- 2022

    Amendments relating to Penalties and Prosecutions by the Finance Bill, 2022

    Amendments relating to Appeals and Revisions by the Finance Bill- 2022

    Amendments relating to Appeals and Revisions by the Finance Bill, 2022

    Amendments relating to Deduction and Collection of Tax at Source by the Finance Bill 2022

    Amendments relating to Deduction and Collection of Tax at Source by the Finance Bill 2022

    Amendments relating to Set off or Carry Forward and Set off of Losses by the Finance Bill 2022

    Amendments relating to Set off or Carry Forward and Set off of Losses by the Finance Bill 2022

    Amendments relating to Unexplained Cash Credits- Investment- Money etc by the Finance Bill 2022

    Amendments relating to Unexplained Cash Credits, Investment, Money etc. by the Finance Bill 2022

    Amendments relating to Income under the Head Profits and Gains of Business or Profession - By Finance Bill 2022

    Amendments to Profits and Gains of Business or Profession – By Finance Bill 2022

    Trending Tags

    • Income Tax
      • All
      • Exempted Incomes
      • Residential Status
      Exempted Incomes - Section 13A

      Exempted Incomes (Section 13A)-Incomes of Political Parties

      Exempted Incomes - Section 10AA

      Exempted Incomes (Section 10AA)- Income of Newly Established Units in Special Economic Zones (SEZ)

      Exempted Incomes - Section 10

      Exempted Incomes under Section 10 to 13A under Income Tax Act. 1956

      Residential Status [Sections 5 to 9B]

      Residential Status [Sections 5 to 9B]

      INCOME TAX (SECTION 1 TO 4)

      INCOME TAX (SECTION 1 TO 4)

      Trending Tags

      • Section-10
      • Exempted Incomes
      • Income Tax Rate
      • Residential Status
      • Exempted Incomes
      • Residential Status
    • Assessment
      • All
      • Assessment of Person
      Features of Assessment of a Firm including Limited Liability Partnership (LLP)

      Features of Assessment of a Firm including Limited Liability Partnership (LLP)

      Trending Tags

        • Assessment of Person
      • Knowledgebase on IT
        • All
        • Investment Planning
        Investment Planning for Tax Savings A.Y. 2023-24

        Investment Planning for Tax Savings A.Y. 2023-24

        Prescribed Reports-Certificates from a Chartered Accountant

        Prescribed Reports/Certificates from a Chartered Accountant under Section 288(2).

        Prescribed Audit Reports under the Income Tax Rules-Act.

        Prescribed Audit Reports under the Income Tax Rules/ Act.

        Investment in National Saving Certificate (NSC)

        Investment in National Saving Certificate (NSC) for A.Y. 2022-23 & 2023-24.

        Investment in TERM LIFE INSURANCE

        Investment in TERM LIFE INSURANCE for A.Y. 2022-23 & 2023-24.

        Investment in National Pension Scheme (NPS)

        Investment in National Pension Scheme (NPS) for A.Y. 2022-23 & 2023-24.

        Trending Tags

        • Assessment of Firm
        • Filing an Appeal
        • Tax Saving Investment
        • Audit Report
        • Investment Planning
      No Result
      View All Result
      Direct & Indirect Taxes, Tax Ready Reckoner for AY 2022-23 & 2023-24
      • Home
      • Gross Total Income (GTI)
        • All
        • Business and Profession
        • House Property
        • Salaries
        [Section 28]-Chargiability-Scope-Meaning of Income

        [Section 28]- Chargeability/Scope/Meaning of Income – Profits and Gain of Business and Profession

        Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

        Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

        Section 36-Other Deductions -Profits and Gains of Business and Profession

        Section 36-Other Deductions -Profits and Gains of Business and Profession.

        General Deductions [Section 37(1)]

        General Deductions [Section 37(1)] -Profits and Gains of Business or Profession

        Section 40A-Expenses or Payments Not Deductible

        Expenses or Payments Not Deductible: [Section 40A] -Profits and Gains of Business or Profession

        Section 43B-Deductions Allowed only on Actual Payment

        Section 43B-Expenses Allowed only on Actual Payment -Profits and Gains of Business and Profession

        Trending Tags

        • Gross Total Income (GTI)
        • Perquisites
        • Allowances
      • Amendments Bill 2022
        Amendments relating to Penalties and Prosecutions by the Finance Bill- 2022

        Amendments relating to Penalties and Prosecutions by the Finance Bill, 2022

        Amendments relating to Appeals and Revisions by the Finance Bill- 2022

        Amendments relating to Appeals and Revisions by the Finance Bill, 2022

        Amendments relating to Deduction and Collection of Tax at Source by the Finance Bill 2022

        Amendments relating to Deduction and Collection of Tax at Source by the Finance Bill 2022

        Amendments relating to Set off or Carry Forward and Set off of Losses by the Finance Bill 2022

        Amendments relating to Set off or Carry Forward and Set off of Losses by the Finance Bill 2022

        Amendments relating to Unexplained Cash Credits- Investment- Money etc by the Finance Bill 2022

        Amendments relating to Unexplained Cash Credits, Investment, Money etc. by the Finance Bill 2022

        Amendments relating to Income under the Head Profits and Gains of Business or Profession - By Finance Bill 2022

        Amendments to Profits and Gains of Business or Profession – By Finance Bill 2022

        Trending Tags

        • Income Tax
          • All
          • Exempted Incomes
          • Residential Status
          Exempted Incomes - Section 13A

          Exempted Incomes (Section 13A)-Incomes of Political Parties

          Exempted Incomes - Section 10AA

          Exempted Incomes (Section 10AA)- Income of Newly Established Units in Special Economic Zones (SEZ)

          Exempted Incomes - Section 10

          Exempted Incomes under Section 10 to 13A under Income Tax Act. 1956

          Residential Status [Sections 5 to 9B]

          Residential Status [Sections 5 to 9B]

          INCOME TAX (SECTION 1 TO 4)

          INCOME TAX (SECTION 1 TO 4)

          Trending Tags

          • Section-10
          • Exempted Incomes
          • Income Tax Rate
          • Residential Status
          • Exempted Incomes
          • Residential Status
        • Assessment
          • All
          • Assessment of Person
          Features of Assessment of a Firm including Limited Liability Partnership (LLP)

          Features of Assessment of a Firm including Limited Liability Partnership (LLP)

          Trending Tags

            • Assessment of Person
          • Knowledgebase on IT
            • All
            • Investment Planning
            Investment Planning for Tax Savings A.Y. 2023-24

            Investment Planning for Tax Savings A.Y. 2023-24

            Prescribed Reports-Certificates from a Chartered Accountant

            Prescribed Reports/Certificates from a Chartered Accountant under Section 288(2).

            Prescribed Audit Reports under the Income Tax Rules-Act.

            Prescribed Audit Reports under the Income Tax Rules/ Act.

            Investment in National Saving Certificate (NSC)

            Investment in National Saving Certificate (NSC) for A.Y. 2022-23 & 2023-24.

            Investment in TERM LIFE INSURANCE

            Investment in TERM LIFE INSURANCE for A.Y. 2022-23 & 2023-24.

            Investment in National Pension Scheme (NPS)

            Investment in National Pension Scheme (NPS) for A.Y. 2022-23 & 2023-24.

            Trending Tags

            • Assessment of Firm
            • Filing an Appeal
            • Tax Saving Investment
            • Audit Report
            • Investment Planning
          No Result
          View All Result
          Direct & Indirect Taxes, Tax Ready Reckoner for AY 2022-23 & 2023-24
          No Result
          View All Result
          Home Gross Total Income (GTI) Salaries

          Perquisites – Valuation of Motor Car / Other Vehicles [Rule 3(2)]

          Valuation of Perquisites provided by the employers in form of Motor Car / Other Vehicles and taxable in the hands of specified employees [Rule 3(2)]

          in Salaries
          A A
          Perquisites - Valuation of Motor Car and Other Vehicles [Rule 3(2)
          Share on FacebookShare on Twitter

          As already discussed, motor car/other vehicles, provided by the employer, is a perquisite only for specified employees because it is a facility provided by the employer to the employees. On the other hand, if the car belongs to the employee and the expenses of running and maintenance of that car are met by the employer, it becomes a perquisite taxable in the hands of all employees as it is an obligation of the employee to maintain his car but such obligation is being met by the employer.

          Value of Perquisite per calendar month (Only completed calendar months to be taken)

          Sl.
          No.
          circumstances Where cubic capacity of engine does not exceed 1.6 litres Where cubic capacity of engine exceeds 1.6 litres
          1. Where the motor car is owned or hired by the employer and the running and maintenance expenses are met or reimbursed by the employer,—
          (a) is used wholly and exclusively in the performance of his official duties; No value provided that the documents specified below this table are maintained by the employer, No value provided that the documents specified below this table are maintained by the employer.
          (b) is used exclusively for the private or personal purposes of the employee or any member of his household; Actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car (which will be 10% p.a. of the cost of motor car or cars) and as reduced by any amount charged from the employee for such use. Actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car (which will be 10% p.a. of the cost of motor car or cars) and as reduced by any amount charged from the employee for such use.
          (c)  is used partly in the performance of duties and partly for private or personal purposes of his own or any member of his household and,—
          (i) the expenses on maintenance and running are met or reimbursed by the employer. 1,800 p.m. (plus Rs. 900 p.m., if chauffeur (driver) is also provided to run the motor car) Rs. 2,400 p.m. (plus Rs. 900 p.m., if chauffeur (driver) is also provided to run the motor car)
          (ii) the expenses on running and maintenance for such private or personal use are fully met by the employee.

          Note: When motor car is provided by employer and expenses of running and maintenance expenses for official use is met by employer but for private use is met by employee, it will be covered by this clause (ii).

          Rs. 600 p.m. (plus Rs.900 p.m., if chauffeur is provided by the employer to run the motor car)

          Note: In this case it is not mentioned in the rule that amount charged from the employee should be reduced from the above value.

          Rs. 900 p.m. (plus Rs.900 p.m., if chauffeur is also provided to run the motor car)

          Note: In this case it is not mentioned in the rule that amount charged from the employee should be reduced from the above value.

           

          2. Where the employee owns a motor car but the actual running and maintenance
          charges (including remuneration of the chauffeur, if any) are met or reimbursed to him by the employer and,— 
          .
          (i) such reimbursement is for the use of the vehicle wholly and exclusively for official purposes, No value provided that the documents specified below this table are maintained by the employer. No value provided that the documents specified below this table are maintained by the employer
          (ii)  such reimbursement is for the use of private or personal purposes of the employee or member of his household

           

          Actual amount incurred by the employer on running and maintenance of motor car including driver’s salary as reduced by the amount charged from the employee for such use. Actual amount incurred by the employer on running and maintenance of motor car including driver’s salary as reduced by the amount charged from the employee for such use.
          (iii)  such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee or any member of his household. The actual amount of expenditure incurred by the employer as reduced by Rs. 1,800 p.m. (plus Rs. 900 p.m. if chauffeur is also provided)

          However, in this case, if actual expenses on running and maintenance for official purpose is more than Rs. 1,800/ 2,700 p.m., as the case may be, he can claim such actual amount of expenditure as deduction by maintaining the documents specified below the table.

          If any amount is recovered from employee the amount so recovered shall be deducted from the above valuation.

          The actual amount of expenditure incurred by the employer as reduced by Rs. 2,400 p.m. (plus Rs. 900 p.m. if chauffeur is also provided)

          However, in this case also, if actual expenses on running and maintenance for official purpose is more than Rs. 2,400/3,300 p.m., as the case may be, he can claim such actual amount of expenditure as deduction by maintaining the documents specified below the table.

          If any amount is recovered from employee the amount so recovered shall be deducted from the above valuation.

          3. Where the employee owns any other auto-motive conveyance but the actual running and maintenance charges are met or reimbursed to him by the employer and,—

           

          (i)  such reimbursement is for the use of the vehicle wholly and exclusively for official purposes, No value provided that the documents specified below this table are maintained by the employer.

           

          Not applicable
          (ii)  such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee.

          If any amount is recovered from employee the amount so recovered shall be deducted from the above valuation,

          The actual amount of expenditure incurred by the employer as reduced by an amount of Rs. 900 p.m.

          However, in this case, if actual expenses on running and maintenance for official purpose is more than Rs. 900 p.m., he can claim such actual amount of expenditure as deduction by maintaining the documents specified below the table.

          If any amount is recovered from employee the amount so recovered shall be deducted from the above valuation.

          Vehicle provided by the employer for commuting from residence to office and back [Explanation to section 17(2)(iii)]:

          The use of any vehicle provided by a company or an employer for journey by the assessee from his residence to his office or other place of work, or from such office or place to his residence, shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate. In other words, such use shall not be treated as private or personal use of the employee.

          Conveyance facility provided to the High Court Judges and Supreme Court Judges is not taxable.

          Where more than one Motor Car is provided

          Where one or more motor cars are owned or hired by the employer and the employee or any member of his household are allowed the use of such motor car or all or any of such motor cars (otherwise than wholly and exclusively in the performance of his duties), the value of perquisite shall be the amount calculated in respect of one car in accordance with item (1)(c)(i) of the above table as if the employee had been provided one motor car for use partly in the performance of his duties and partly for his private or personal purposes and the amount calculated in respect of the other car or cars in accordance with item (1)(b) of the above table as if he had been provided with such car or cars exclusively for his private or personal purposes.

          Specific documents to be maintained for S. No. (1)(a) or S. Nos. (2) and (3) of the above table

          (i)      the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage, and the amount of expenditure incurred thereon;

          (ii)     the employer gives a certificate that the expenditure was incurred wholly and exclusively for the performance of his official duty.

          EXAMPLE :

          Compute the perquisite value of the car for the assessment year 2023-24 in the following  situation if the taxable monetary emoluments of X are Rs.1,50,000: 

          (i)      The car is owned by X but the running and maintenance expenses amounting to Rs. 40,000 during the  previous year are met by the employer. The car is used 

          (a)     for personal benefit of X 

          (b)     only for official duties 

          (c)     30% for personal benefit and 70% for official use 

          (ii)     The employer provides a car of 1.5 ltr. engine cubic capacity costing Rs. 5,00,000 exclusively for the  personal benefit of X. The expenses incurred on the car are Rs. 52,000 

          (iii)    The employer provides a car (below 1.6 lt.) along with a driver to X partly for official and partly for  personal purpose. The expenses incurred by the company are: 

          (a) running and maintenance expenses 32,000 
          (b) driver’s salary 36,000

          (iv)    In case (iii) the employer maintains a log book and it is established than 30% of the total mileage of the  car is for personal use of X and 70% for official duties.

           

          (v)     The employer provides a car (above 1.6 lt.) to X which is used for official work and is also used by X for  commuting from his residence to office and back. 

          (vi)    X is provided with 2 cars to be used for official and personal work and the following information is  available from the company’s records:

          Car 1  exceeding 1.6 lt. Car 2  below 1.6 lt.
          Rs. Rs.
          Cost of the car 6,00,000 4,00,000 
          Running and maintenance 60,800 48,000
          Salary of driver 44,000 44,000

          SOLUTION :

          The solution in each case shall be as under: 

          (i)

          (a)     The entire amount of expenditure of Rs.40,000 met by the employer shall be a taxable perquisite. This  is an obligation of the employee being discharged by the employer and is therefore, a perquisite  taxable in the hands of all employees. 

          (b)     Not a perquisite, if the specified documents are maintained. 

          (c)     In this case, the proportion of official and private use is not known. The perquisite value shall be the  amount of expenditure incurred by the employer as reduced by Rs.1,800/2,400 as the case may be,  unless the specified documents are maintained to claim deduction higher than Rs.1,800/2,400 p.m. 

          Therefore, Rs.40,000 – 21,600 = 18,400 will be a perquisite. 

          (ii)     The entire running and maintenance expenses and 10% of cost being the normal wear and tear of car will  be a perquisite, i.e., Rs.52,000 + 50,000 = Rs.1,02,000 will be taxable. 

          (iii)    The perquisite value shall be: 

           

          Rs.
          For Car: (1,800 x 12) 21,600 
          For Driver: (900 x 12) 10,800
          32,400

          (iv)    Same as calculated under (iii) above. 

          (v)     In this case, there is no perquisite because the car is not used for the personal benefit of X. Conveyance  facility for commuting from residence to office and back is not considered as a perquisite. However, the  specified documents shall have to be maintained. 

          (vi)    In this case, for one car the perquisite value shall be as if it is used for official and personal benefit. The  other car will be valued as if it is used exclusively for the personal purposes of X. 

          The perquisite value shall be calculated as under: 

          Step 1:

          Assume car 1 is used for personal and official use and car 2 is exclusively for X. The value shall be as  under: 

          Rs.
          Car 1 (2400 x 12) + (900 x 12) 39,600
          Car 2 Running and maintenance expenses 48,000
          10% of the cost for normal wear and tear 40,000
          Salary of driver 44, 000
          1,32,000

          Therefore total value of perquisite = Rs.39,600 + Rs.1,32,000 = Rs. 1,71,600 

          Step 2:

          Assume car 2 is used for personal and official use and car 1 is exclusively for X. The value shall be as  under: 

          Rs.
          Car 2 (1800 × 12) + (900 × 12) 32,400
          Car 1 Running and maintenance expenses 60,800
          10% of the cost for wear and tear 60,000
          Salary of driver 44,000
          1,64,800

          Therefore total value of perquisite = Rs. 32,400 + Rs. 1,64,800 = Rs.1,97,200 

          In this case, he should treat car 1 to be used partly for performance of duties and partly for personal use. Thus,  the perquisite value of the cars shall be Rs. 1,71,600.

          Tags: Gross Total Income (GTI)Perquisites
          ShareTweetShare
          Previous Post

          Valuation of Various Perquisites – for Calculating Salary Income

          Next Post

          Perquisites – Fringe Benefits or Amenities which shall be Taxable Perquisite in the hands of All Employees

          Next Post
          Perquisites - Fringe Benefits or Amenities

          Perquisites - Fringe Benefits or Amenities which shall be Taxable Perquisite in the hands of All Employees

          • Trending
          • Comments
          • Latest
          Rates of Income Tax for Assessment Year 2022-23 & 2023-24

          Rates of Income Tax for Assessment Year 2022-23 & 2023-24

          January 12, 2023
          Exempted Incomes - Section 10

          Exempted Incomes under Section 10 to 13A under Income Tax Act. 1956

          December 23, 2022
          Residential Status [Sections 5 to 9B]

          Residential Status [Sections 5 to 9B]

          November 22, 2022
          Exempted Incomes - Section 13A

          Exempted Incomes (Section 13A)-Incomes of Political Parties

          December 24, 2022
          Investment in TERM LIFE INSURANCE

          Investment in TERM LIFE INSURANCE for A.Y. 2022-23 & 2023-24.

          6
          Rates of Income Tax for Assessment Year 2022-23 & 2023-24

          Rates of Income Tax for Assessment Year 2022-23 & 2023-24

          0
          Amendments relating to Incomes which do not Form Part of Total Income by The Finance Bill 2022

          Amendments relating to ‘Exempted Incomes -Section-10’ by The Finance Bill 2022

          0
          Amendments relating to Income under the Head Profits and Gains of Business or Profession - By Finance Bill 2022

          Amendments to Profits and Gains of Business or Profession – By Finance Bill 2022

          0
          [Section 28]-Chargiability-Scope-Meaning of Income

          [Section 28]- Chargeability/Scope/Meaning of Income – Profits and Gain of Business and Profession

          January 20, 2023
          Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

          Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

          January 20, 2023
          Section 36-Other Deductions -Profits and Gains of Business and Profession

          Section 36-Other Deductions -Profits and Gains of Business and Profession.

          January 20, 2023
          General Deductions [Section 37(1)]

          General Deductions [Section 37(1)] -Profits and Gains of Business or Profession

          January 19, 2023

          Recent News

          [Section 28]-Chargiability-Scope-Meaning of Income

          [Section 28]- Chargeability/Scope/Meaning of Income – Profits and Gain of Business and Profession

          January 20, 2023
          Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

          Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

          January 20, 2023
          Section 36-Other Deductions -Profits and Gains of Business and Profession

          Section 36-Other Deductions -Profits and Gains of Business and Profession.

          January 20, 2023
          General Deductions [Section 37(1)]

          General Deductions [Section 37(1)] -Profits and Gains of Business or Profession

          January 19, 2023
          Direct & Indirect Taxes, Tax Ready Reckoner for AY 2022-23 & 2023-24

          Income Tax Management and Tax Ready Reckoner with Tax Planning for the Assessment Years 2022-2023 & 2023-2024 - for Students, Salaried, Professionals & Businessman.

          Browse by Category

          • Amendments Bill 2022
          • Assessment
          • Assessment of Person
          • Business and Profession
          • Exempted Incomes
          • House Property
          • Income Tax
          • Investment Planning
          • Knowledgebase on IT
          • Residential Status
          • Salaries

          Recent News

          [Section 28]-Chargiability-Scope-Meaning of Income

          [Section 28]- Chargeability/Scope/Meaning of Income – Profits and Gain of Business and Profession

          January 20, 2023
          Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

          Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

          January 20, 2023
          • Home
          • Gross Total Income (GTI)
          • Amendments Bill 2022
          • Income Tax
          • Assessment
          • Knowledgebase on IT

          © 2022 : incomeTAXManagement.in - Assessment Years 2022-2023 & 2023-2024.

          No Result
          View All Result
          • Home
          • Gross Total Income (GTI)
          • Amendments Bill 2022
          • Income Tax
            • Exempted Incomes
            • Residential Status
          • Assessment
            • Assessment of Person
          • Knowledgebase on IT
            • Investment Planning

          © 2022 : incomeTAXManagement.in - Assessment Years 2022-2023 & 2023-2024.