Navigating Car Lease Policies: How Do You Handle Taxation for Mixed Use?

Hi Seniors,

We are introducing the car lease policy in our company from December '10. I want to know the following details:

1. The car will be used partly for personal and partly for official purposes.
2. If the company purchases the car and gives it to the employee, what perquisites taxation will have to be taken care of?
3. If the car is taken from a third party (Leasee company), then what will be the perquisites taxation?

Waiting for your help through a reply.

Regards,
Ravi

Till now, I have not received the answers.

Regards,
Ravi

Hi Seniors,

We are introducing the car lease policy in our company from December '10. I want to know the following details:

1. The car will be used partly for personal and partly for official.
2. If the company purchases the car and gives it to the employee, what are the perquisites taxation considerations that need to be taken care of?
3. If the car is taken from a third party (Leasee company), then what will be the perquisites taxation?

Waiting for your help through a reply.

Regards,
Ravi

I am part of a leasing company, and with my experience, I can share input on your query. On a company-provided car, the perquisite tax will be based on cubic capacity and driver facility as mentioned below:

- INR 1800 (plus INR 900 if the driver is provided) per month if the cubic capacity of the car is < 1.6 litres
- INR 2400 (plus INR 900 if the driver is provided) per month if the cubic capacity of the car is > 1.6 litres.

In the Perquisite Tax circular, there are a few more scenarios given. In any scenario, as long as the vehicle is a company-provided car, there will be an implication of perquisite tax.

Trust this suffices the purpose. If you need any more clarification, let me know.

Regards,
Sachin