Rule 3 specifies perquisite valuation for “any other automotive conveyance” (automotive vehicles other than car) as follows. 150 per month for the driver. Taxable value of perquisitesa) Use of Laptops and Computers: Nilb) Movable asset other than Laptops, computers and Motor Car*: 10% of original cost of the asset (if asset is owned by the employer) or actual higher charges incurred by the employer (if asset is taken on rent) less amount recovered from employee. (1)(c)(i) of the above Table as if the … The use of motor car by an employee for the purpose of going from residence to the office or from office back to residence, is not chargeable to tax at all. The term perquisite states extra benefits that employees will get in addition to the normal salary to the employees. VALUE OF PERQUISITE PER CALENDAR MONTH. Motor Car. The value of the perquisite depends on the cubic capacity of the engine and whether the employer or employee pays for the car’s maintenance and running cost. Important decisions taken by the Council at its meeting held on 4th-5th … Motor car is the movable asset which is one of the most basic perquisite given by the company to middle and top level management employees, so that they fulfill their duties more efficiently and timely. as reduced by the rent actually paid by the employee. II Perquisite on Motor car provided by the Employer [ Rule 3(2)]: (1) If an employer provides motor car facility to his employee, the value of such perquisite shall be : a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties. Other assets. 5 Perquisite arising out of supply of gas, electric Energy or water: This shall be determined as the amount paid by the employer to the agency supplying the same. Motor car as a perquisite is one of the famous perquisites provided by employer. 1200 1800p.m., if hp>16 Rs. One case presume that the term “other automotive conveyance” refers to vehicles such as motorcycle and autorickshaw. the above guideline is specified in Income Tax Act “Rule-3, Income-tax Rules” “Value of perquisite per calendar month” 1(c)(i) & 1(c)(ii). The monthly perquisite value is as follows. (B) Used Wholly and exclusively for Official Duties. Note :nothing is deductible in respect of any amount recovered from employee. No. When the Motor Car is Owned or Hired by the Employer A. Latest posts by Lavish Dey . 1. No. Motor car as a perquisite is one of the famous perquisites provided by employer. Motor Car is used wholly and exclusively in the performance of Official Duties : When the CC is less than / or more than 1600 CC : - Perquisites Value is NIL ; B. Circumstances: Where cubic capacity of engine does not exceed 1.6 litres: Where cubic capacity of … If motor car is owned or leased by the employer . However, in this case, instead of providing a chauffeur the employer allowed the assessee to engage the services of a driver and his salary was reimbursed to the assessee. LTA can be categorized into 2 parts: Any travel concession received by employees from their employers for themselves and their families to cover expenses incurred in travelling when they are on leave. Illustration. Where a motor car is transferred by an employer to employee, the cost of the motor car as reduced by depreciation @ 20% per annum on actual cost of such motor car and amount recovered from the employee will be the value of perquisite. Generally, this kind of perquisite is provided to senior employees of the organization. Valuation of Perquisites in respect of Motor Car and other Modes of Conveyance [Rule 3(2)] 1. 2.less:if car hp < 16, perquisite is Rs. (Example – if used for 1 year 11 months only 1 year shall be counted) . In the above case, the use of asset is granted on 1-10-2012. Reference: Income Tax Rule 3: Valuation of Motor Car. In simple words, this allowance is applicable for every employee who uses a company-owned or personal vehicle for official purposes. Perquisite on Motor car provided by the Employer [Rule 3(2)]: If an employer provides motor car facility to his employee, the value of such perquisite shall be : Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties. 4. What will be the value of perquisite in respect … (3) The value of benefit to the employee or any member of his household resulting from the provision by the employer of services of a sweeper, a gardener, a watchman or a personal attendant, shall be the actual cost to the employer. 10 Rule 3(3) Services of sweeper, gardener,watchman or personal attendant Taxable as perquisite in the hands of the employee @ actual amount of expenditure incurred by the employer on the running and maintenance of motor car, driver’s salary, depreciation on motor car(@ 10% of cost) less any amount recovered from the employee. Mr. Kumar is working in Essem Ltd. at a monthly salary of Rs. Broadly, “perquisite” is defined in the section 17(2) of the Income-tax Act as including: 1) Value of rent-free or concessional rent accommodation provided by the employer. … The monthly salary of servant is Rs. This was the position prevailing before FBT was brought onto the statute. The above rule will remain same in case of Government employee as well as non- Government employee. Motor Car [Sub-rule (2) of Rule 3] : ... For computing the perquisite value of motor car, the normal wear and tear of a motor -car shall be taken at 10% per annum of the actual cost of the motor-car or cars. Union or State Government Employees [ Section 17(2)(i) read with Rule 3(1) ] The value of perquisite is the license fee as determined by the Govt. Valuation of Perquisites in respect of Credit Card Facilities [Rule 3(7)(v)] The perquisite in respect of credit card is taxable as follows— (A) Used for Personal or Private Purposes : Perquisites Value is equal to Expenses, Membership Fees and Annual Fees incurred by the Employee and Reimbursed / Paid by the Employer. Taxable value of perquisites (See Note 1 below) 6. Rule 3 - Valuation of perquisites Note:- Example:-X owns car (1400cc). b) Actual expenditure incurred by the employer on the running and maintenance of motor car including … The term running and maintenance charges includes expenses incurred on … Perquisites … ----- QUESTIONS Q1 The company purchased 1/5/2012 Laptop for Rs.40000 It was gifted to Employee on 1/8/2014 … The taxation rules of valuation of motor cars as perquisites are as under: Page Contents. The taxation rules of valuation of motor cars as perquisites are as under: Page Contents. Now, some fact-checks. *See Note 1 for computation of perquisite value in case of use of the Motor Car Motor Car [Rule 3(2)] Motor-car facility provided by an employer is taxable in the hands of employee on the following basis: Case Taxable Value In hands of ; Car is owned and maintained by the employer. If the car is used wholly for personal purpose then wear and tear of it (i.e. Valuation of perquisite in respect of motor car depend on the ownership of that motor car i.e., the car may be owned by you (employee) or your employer. II Perquisite on Motor car provided by the Employer [ Rule 3(2)]: (1) If an employer provides motor car facility to his employee the value of such perquisite shall be: a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties. read with Rule 3(2) Motor Car / Other Conveyance. 600 to 800 per month depending on the engine capacity of the car. Plus depreciation (10% of the original cost of car)/ hire charges(if car is hired) 3.Less :amount recovered from the employee: Not a perquisite(see note-1) if car hp < 16, perquisite is Rs.1200 p.m., if hp>16 Rs.1600 p.m. with Rs.600 p.m. chauffeur salary. Perquisite on Motor car provided by the Employer [ Rule 3(2)]: (1) If an employer provides motor car facility to his employee the value of such perquisite shall be : a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties. If such car is taken by the employer on hire and hire charges are paid by the employer then such hire charges and driver salary if any will be treated as perquisite. In formal IT parlance, it’s a called the motor car allowance or perquisite. or higher sum as recorded by logbook by employer 3.Less :amount recovered from the employee (if any) Car is owned/ hired by the employer and expenses met by the employer: 1.Actual Expenses by employer 2. Perquisite value of motor car = ` 1,62,600 Gross Salary 4,47,300.00 Less: Standard Deduction u/s 16(ia) (40,000.00) ... Rule 3(2) Car used partly for official and partly for personal purposes – Value shall be amount paid by employer less ` 1,800 p.m. where cubic capacity of engine does not exceed 1.6 litres or ` 2,400 p.m. where cubic capacity of the engine exceeds 1.6 litres. 3) Any sum paid by employer in respect of an obligation, which was actually payable by the assessee. ..Rule 3(2) Motor Car. Motor Car is used wholly and exclusively in the performance of Official Duties : When the CC is less than / or more than 1600 CC : - Perquisites Value is NIL ; B. 2. In such a situation, as provided in rule 3(c)(ii), the value of car perquisite is to be taken at Rs. Provided that . Any other assets transferred by employer to employee except motor car, computer and electronic gadgets will be considered for … 1 If motor car is owned or leased by the employer . is taxable perquisite Depreciation is calculated as follows Note If any amount recovered from Employee , it is to be reduced Completed year means period starting from date assets put to use by Employee. Any other automotive owned by employee, used partially for work and expenses reimbursed by employer actual expenses reimbursed (-) 900. When the Motor Car is Owned or Hired by the Employer (A). 2) Value of any benefit/amenity granted free or at concessional rate to specified employees etc. When Car is owned by the employee . 10% per annum of the actual cost of the motor car) and driver salary will be treated as perquisite and taxable in the hand of employee. Motor Car facility is one of the perquisites and computing taxable value of this facility worries almost both the employers and employee. Professional Tax Consultant and Article Writer. Perquisite on Motor car provided by the Employer [ Rule 3(2)]: (1) If an employer provides motor car facility to his employee the value of such perquisite shall be : a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties. Sl. LTA Exemption Rule-The following image stated the exemption rule of LTA as per the Income Tax Act. 1,000. 1600 2400 p.m. with Rs. These benefits are provided to the employees free of cost or at concessional rates. Author; Recent Posts; Lavish Dey. 84,000. 1.8 Value of perquisite in respect of motor car provided by the employer ... (other than assets already specified in Rule 3 and other than laptops and computers) belonging to the employer shall be determined at rate of 10% per annum of the actual cost of such asset to the employer. 2)(A) The value of perquisite by way of use of motor car to an employee by an employer shall be determined in accordance with the following Table, namely: — TABLE II. MOTOR CAR The perquisites value of a motor car provided by an employer both for official and personal use has been enhanced by Rs. Provided that 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 Sl. Where the employee is provided with or allowed the use of motor car for his private or personal purposes at a concessional rate, the value of the perquisite will first be computed as if the perquisite had been provided by the employer free of charge and the amount so computed will be reduced by the amount payable by the employee to the employer. Value of perquisite arising on account of motor car provided by the employer (maintenance and running expenses of the car are also met by the employer) which can be used partly for private purpose of employee or any member of his household and partly for official purpose will be computed as follows: Value of perquisite will be calculated at the rate of Rs. 600 900 p.m. chauffeur salary. As per the first-ever Employee Benefits study in India, 72% employees prefer to opt for fuel allowances. The company has provided him with a domestic servant and the salary of the servant is paid by the company. However following compliances are necessary: The employer has maintained complete details of the journey undertaken … i) The vehicle is used wholly and exclusively for official duties. As per Section 17(2) of the Income Tax Act, 1961 “Perquisites” includes: Value of rent-free or concessional rate of rental accommodation provided to the employee by the employer. The taxability of perquisites is covered under Rule 3 of Income Tax Rules, 1962. 1. 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-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 Sl. 1,800 per month where … Value of Motor car per Calendar Month where it is used both for officially & personal purpose (As per rule 3(2)(A) and Table II for Value of perquisite) Sl. No. For the purposes of this sub-rule, the normal wear and tear of a motor-car shall be taken at 10 per cent per annum of the actual cost of the motor-car or cars. Generally, this kind of perquisite is provided to senior employees of the organization. Valuation of Perquisite of Motor Car and other Modes of Conveyance [Rule 3(2)] for Computing Salary Income . No. If the motor car or any other automotive conveyance is owned by the employee but the actual running and maintenance charges are met or reimbursed by the employer, the method of valuation of perquisite value is different. The new rule 3 is deemed to have come into effect from 1 st day of April 2009. When Car is owned by the employee and the … 3.Used partially for work, then monthly valuation will be as per table given below; 9..Rule 3(2) Motor Car. Some more to known: There is one more thing we must know that If the car is used for both official and personal purpose, it is not … TaxHeal is a complete portal for latest Updates and Information on GST, Income Tax Return, Tax Saving, GSTR etc.It also provides Book for CA,TAX exams. 300 per month and Rs. Rule 3 of the Income Tax Rules, which pertains to valuation of perquisites, provides guidelines on how to tax amounts paid to employees for the purpose of meeting “running and maintenance charges” of motor car and other vehicles.
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