Hi,
Since you are including the same into the company assets, the "EMPLOYEES" will save tax on it, but the employer will pay taxes (FBT on the Car EMI paid). 20% of the car EMI is taxed on the employer had; the same is applicable on Fuel, maintenance, and Driver's salary.
First, you need to draft a policy on how car-leased EMI will be paid, Fuel and Maintenance expenses - will it be on spares, service of Car, insurance, and Driver's salary. Let us take a small example. Suppose a car is purchased by the company for 6.00 lakhs, including (Insurance, taxes, and registration). It needs to be paid in 36 months (let us assume it). Then, per year, the 2.0 lakhs will be tax exempted for the EMPLOYEE, BUT EMPLOYER has to pay tax on 40000.00 (20% of 2.0 lakhs), similar is the case with fuel, maintenance, and driver salary.
Ensure you draft a policy on what would happen if the employee leaves the organization in between and what would happen if the car is sold in between. You should also check when an employee wants to sell the car in between and the principal outstanding is around 4.0 lakhs, and the car is sold for 3.8 lakhs - who will bear the differential amount or vice versa extra amount (you need to draft certain policies on this also). Please check with company leasing agents before implementing the same.
Regards,
Rajeev