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Mr A, an employee, has been provided by his employer, a motor car of 1.3 litre capacity which is owned by the employer. The car has been used for personal as well as office purpose. Running expenses are paid by the employer. What will be the value of taxable perquisite for the PY 2019-20, assuming that chauffeur facility is not being provided?

Mr A, an employee, has been provided by his employer, a motor car of 1.3 litre capacity which is owned by the employer. The car has been used for personal as well as office purpose. Running expenses are paid by the employer. What will be the value of taxable perquisite for the PY 2019-20, assuming that chauffeur facility is not being provided? Correct Answer Rs. 1800 per month

The correct answer is Rs. 1800 per month

Key Points

The taxable value of the perquisite received by Mr. A in the form of a Motor car with an engine capacity of 1.3 litres will be Rs. 1800 if the chauffeur facility is not being provided.

Perquisites: Perquisites are the cash or non-cash benefits granted by an employer to the employee above their basic salary. For Example, Use of the company's car, accommodation provided by the employer. Etc. The Perquisites may be fully or partially or non-taxable depending upon their nature.

Valuation of Perquisite in respect of Motor Car under Rule 3 of Income Tax Act, 1962 (Car used for both Private and official purpose)

Engine Capacity Value of Perquisites Chauffeur Facility
If car engine capacity ≤ 1600cc Rs. 1,800 p.m Rs. 900 p.m. if a driver is provided
If car engine capacity > 1600cc Rs. 2,400 p.m Rs. 900 p.m. if a driver is provided


Note:

  • The above cc represents the cylinder capacity of an engine.
  • The value of perquisites mentioned above is calculated when the car is owned or hired by the employer and expenses are met by the employer

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