Page 199 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes
such reimbursement is for Subject to the provisions Not Applicable
the use of vehicle partly for of clause (B) of this sub-
official purposes and partly rule, the actual amount
for personal or private of expenditure incurred
purposes of the employee. by the employer as
reduced by the amount
of ` 900.
Source: http://finotax.com/itax/itinfo3.htm
Provided that where one or more motor-cars are owned or hired by the employer and the
employee or any member of his household are allowed the use of such motor-cars
(otherwise than wholly and exclusively in the performance of his duties), the value of
perquisite shall be the amount calculated in respect of one car in accordance with Sl. No.
(1)(c)(i) of the above Table as if the employee had been provided one motor-car for use
partly in the performance of his duties and partly for his private or personal purposes and
the amount calculated in respect of the other car or cars in accordance with Sl. No. (1)(b) of
above Table as if he had been provided with such car or cars exclusively for his private or
personal purposes.

Where the employer or the employee claims that the motor-car is used wholly and
exclusively in the performance of official duty or that the actual expenses on the running
and maintenance of the motor-car owned by the employee for official purposes is more
than the amounts deductible in Sl. No. 2(ii) or 3(iii) of above Table, he may claim a higher
amount attributable to such official use and the value of perquisite in such a case shall be
the actual amount of charges met or reimbursed by the employer as reduced by such
higher amount attributable to official use of the vehicle provided that the following
conditions are fulfilled:-
(a) the employer has maintained complete details of journey undertaken for official
purpose which may include date of journey, destination, mileage, and the amount
of expenditure incurred thereon;

(b) the employer gives a certificate to the effect that the expenditure was incurred
wholly and exclusively for the performance of official duties.

Notes For the purposes of valuation, the normal wear and tear of a motor-car shall be
taken at 10% per annum of the actual cost of the motor-car or cars.

3. Sweeper, Gardener, Watchman or a Personal Attendant: The value of benefit to the employee
or any member of his household resulting from the provision of the employer of services
or a sweeper, a gardener, a watchman or personal attendant, shall be the actual cost to the
employer. The actual cost in such a case shall be the total amount of salary paid or payable
by the employer or any other person on his behalf for such services as reduced by any
amount paid by the employee for such services.
4. Gas, Electric Energy or Water: The value of benefit to the employee resulting from the
supply of gas, electric energy or water for his household consumption shall be determined
as the sum equal to the amount paid on that account by the employer to the agency
supplying the gas, electric energy or water. Where such supply is made from the sources
owned by the employer, without purchasing them from any other outside agency, the
value of perquisites would be the manufacturing cost per unit incurred by the employer.
Where the employee is paying any amount in respect of such services, the amount so paid
shall be deducted from the value so arrived at.

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