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Calculation of perquisite of motor car facility and provident fund under salary head

Motor Car facility:- If any motor car facility is provided than it is treated as perquisite under salary Head and it is taxable as below:-

Value of Motor car facility

Owner

Expenses made by

Fully personal purpose

Partly official or partly personal use

Employer

Employer

10% Depreciation

Up to 1.6 liter cubic capacity 1800 per month. In exceeding of 1.6 liter 2400 per month+ 900 P.M.drivers salary if provided by the employer.

Employer

Employee

10% depreciation + Drivers salary if provided by the employer

Up to 1.6 liter cubic capacity Rs. 600 per month. In exceeding of 1.6 liter Rs. 900 per month+ 900 P.M.drivers salary if provided by the employer

Employee(taxable for all type of employee)

Employer

Expenses made by employer + drivers salary if provided

Expenses incurred by the employer will be reduced by 1800 per month up to 1.6 liter cubic capacity & 2400 per month in excess of 1.6 liter.

 

When more than one car is provided by employer: - in this situation is deemed that one car is used for partly personally use and remaining car is used for personally purpose.

If car is provided for official use than it will be exempt.

Provident fund: - there are four types of provident fund as below:-

1. Statuary provident fund

2. Public provident fund

3. Recognized provident fund

4. Unrecognized provident fund

Value of provident fund

 

Particulars

Statuary provident fund

Recognized provident

fund

Unrecognized provident fund

Public provident fund

Employee’s contribution

Deduction u/s 80C is available from gross total income subjects to the limit specified therein.

Deduction u/s 80C is available from gross total income subjects to the limit specified therein

No deduction u/s 80C is available.

Deduction u/s 80C is available from gross total income subjects to the limit specified therein

Employer’s contribution

Fully exempt from tax

Exempt up to 12% of salary. Amount in excess of 12% is included in gross salary

No exempt but also not taxable every year.

Not applicable as there is only assessee’s own contribution

Interest on provident fund

Fully exempt from tax

Exempt u/s 10 up to 9.5% per annum. Interest credited in excess of 9.5% per annum is included in gross salary

Not exempt but also not taxable every year.

Fully exempt

Repayment of lump sump amount on retiring/ resignation/termination

Fully exempt u/s 10(11)

Fully exempt

Accumulated employee’s contribution is not taxable. Accumulated employer’s contribution+ interest on employer’s contribution (till date) is taxable as profit in lieu of salary. Interest on employees contribution (till date) is taxable as income from other sources

Fully exempt u/s 10(11)

Prepared By Narendra Kumawat