I want to know that the following are taxable perks in the hand of employee
1. If car owned by the employee and driver salary & repair and maintenance expenses reimbursed by the company
2 If car provided by the company and driver salary & maintenance expense reimbursed to employee
baljinder_s@………….com
The reimbursement of salary to the driver provided to an employee is not taxable u/s 17(1) i.e as salary. Further , expense on provision of car along with driver to the employee is also out of definition of perquisites. Even rule 3(2) of the I T Rule is deleted now. These expenses are now covered under the newly inserted Chapter XII-H for Fringe Benefit Tax .These types of expense are covered under two broader terms Conveyance and “Repairs & Maintenance of motor cars” given under section 115WB(2)(F) and 115WB(2)(H) respectively. The two sections are given below:
1. If car owned by the employee and driver salary & repair and maintenance expenses reimbursed by the company
2 If car provided by the company and driver salary & maintenance expense reimbursed to employee
baljinder_s@………….com
The reimbursement of salary to the driver provided to an employee is not taxable u/s 17(1) i.e as salary. Further , expense on provision of car along with driver to the employee is also out of definition of perquisites. Even rule 3(2) of the I T Rule is deleted now. These expenses are now covered under the newly inserted Chapter XII-H for Fringe Benefit Tax .These types of expense are covered under two broader terms Conveyance and “Repairs & Maintenance of motor cars” given under section 115WB(2)(F) and 115WB(2)(H) respectively. The two sections are given below:
(2) The fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely:
(F) conveyance ;
(H) repair, running (including fuel), maintenance of motor cars and the amount of depreciation thereon;
Therefore answer to your questions are
If car is owned by employee , reimbursement of driver salary will fall within the term Conveyance and running and maintenance expense under section 115WB(2)(H.
In case car is provided to employee , same treatment is given .The salary of driver is taxed u/s 115WB(2)(F) and other expense on car including Depreciation under section 115WB(2)(H) of the I T Act.
In nutshell, the employee is not taxed at all for these expense.
If car is owned by employee , reimbursement of driver salary will fall within the term Conveyance and running and maintenance expense under section 115WB(2)(H.
In case car is provided to employee , same treatment is given .The salary of driver is taxed u/s 115WB(2)(F) and other expense on car including Depreciation under section 115WB(2)(H) of the I T Act.
In nutshell, the employee is not taxed at all for these expense.
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