Dear All If we want to give our top management company cars , what are the taxes we are liable to pay. Are we also liable to pay the fuel cost and the drivers salary. Please help. Regards Gaurav
From India, Indore
From India, Indore
Hi Gaurav,
I work in one of the leading car leasing company.
So in refernce to your query I can suggest if you can forward your mail ID and the company name, then I can forward you my company details and can also clarify your queries
And we can also help you in formulating Car policy for your organization
Regards,
Bipin
I work in one of the leading car leasing company.
So in refernce to your query I can suggest if you can forward your mail ID and the company name, then I can forward you my company details and can also clarify your queries
And we can also help you in formulating Car policy for your organization
Regards,
Bipin
HI,
Since you are including the same into the company assests, 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 employer had, same is applicable on Fuel & maintenence & Drivers salary.
First you need to draft a policy on how car leased EMI will be paid, FULE & Maintenence expenses will it be on spares & service of Car, insurance & drivers salary.
let us take aSmall example
Suppose a car is purchsed by the company for 6.00 lakhs including (Insurance, taxes & registration) it needs to be paid in 36 months( let us assume it ) then per year the 2.0lakhs 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 fule & maintenence & driver salary.
Ensure you draft a policy what would happen if the employee leaves the organisation in b/w & what would happen to the car is sold in b/w,
you should also check when an employee wants to sell the car in b/w and the principal outstanding is around 4.0 laksh & car is sold for 3.8 lakhs who will bear the diffrential 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
From India, Bangalore
Since you are including the same into the company assests, 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 employer had, same is applicable on Fuel & maintenence & Drivers salary.
First you need to draft a policy on how car leased EMI will be paid, FULE & Maintenence expenses will it be on spares & service of Car, insurance & drivers salary.
let us take aSmall example
Suppose a car is purchsed by the company for 6.00 lakhs including (Insurance, taxes & registration) it needs to be paid in 36 months( let us assume it ) then per year the 2.0lakhs 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 fule & maintenence & driver salary.
Ensure you draft a policy what would happen if the employee leaves the organisation in b/w & what would happen to the car is sold in b/w,
you should also check when an employee wants to sell the car in b/w and the principal outstanding is around 4.0 laksh & car is sold for 3.8 lakhs who will bear the diffrential 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
From India, Bangalore
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Company Car Policy.doc