TaxTMI 
TaxTMI 
Employee Car Policy
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....mployee Car Policy<br> Query (Issue) Started By: - Narayan Pujar Dated:- 8-1-2025 Last Reply Date:- 9-1-2025 Goods and Services Tax - GST<br>Got 1 Reply<br>GST<br>The Company has an HR policy allowing....
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.... 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 Sala....
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....ry'. 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 ₹10....
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.... 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 limit....
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...., 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 total....
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.... 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 R....
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....eply By Shilpi Jain: The Reply: The invoice for the purchase of car is in the name of the employee or the Company?<br> Discussion Forum - Knowledge Sharing ....