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TMI BlogEmployee Car PolicyX X X X Extracts X X X X X X X X Extracts X X X X ..... Employee Car Policy X X X X Extracts X X X X X X X X Extracts X X X X ..... g employees of certain grades to use company-owned cars official purposes. This benefit is considered a 'perquisite' under the Income Tax Act when determining income under 'Income from Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary'. In some instances, employees may select a car exceeding their eligibility limit, with the excess amount recovered from the employee. For example, if an employee's eligibility is ₹1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 lakh and they choose a car worth ₹15 lakh, the ₹5 lakh difference is recovered from them. The accounting treatment involves capitalizing the vehicle up to the employee's eligibility limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, while the excess amount is deducted from the purchase price. Additionally, the Company recovers the insurance premium corresponding to the excess amount, as insurance is based on the car's tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l value. In this regard, my queries are as follows: * Recovery of amounts exceeding the employee's eligibility limit. * Recovery of insurance premiums from employees for excess amount recovered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply By Shilpi Jain:
The Reply:
The invoice for the purchase of car is in the name of the employee or the Company? X X X X Extracts X X X X X X X X Extracts X X X X
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