Company car sale of exiting exployee will taxable

[udit gupta]

What will be income tax If company sold a car to company employee who is leaving company Regards Narendra

[CAGOPALJI AGRAWAL]

The actual cost of the car to the company minus 20% depreciation for each completed year on WDV method less consideration received would be taxable as perquisite in the hands of employee if the difference is positive.

AI Summary

Perquisite taxation when employer sells company car to departing employee; taxable amount equals depreciated cost less sale consideration. Sale of a company car to a departing employee is treated as a taxable perquisite where the employer's cost less depreciation (20% per completed year on the WDV method) minus the consideration received, if positive, constitutes the taxable amount.