Motor Car

When an employer provides a car or any other vehicle for the private use of the employee or any other member of his family, it is a perquisite which is taxable in the hands of the employee

The nature of ownership of the vehicle and the manner of use of the car is of prime importance.

Perquisites Motor Car


  1. For Car (owned by employee) used for only Official purposes, the employer needs to maintain complete details of journey (log book): date of journey, destination, mileage, and the amount spent. Also the employer gives a certificate the expenditure was incurred fully and exclusively for official work
  2. Use of employer owned car to travel from residence to work and back is not a taxable perquisites
  3. Where the employee has a automotive conveyance but the actual running and maintenance expenses are met or reimbursed by the employer

(i) Employee‘s conveyances is being used only for official purposes : No value to be taxed but a proper log book with all required details is required to be maintained.

(ii) Employee‘s conveyance used partly for official purposes and partly for personal or private purposes of the employee.  : Taxable value of the perk shall be the actual amount of expenditure incurred by the employer as reduced by the amount of 900 p.m. or a higher sum for official purposes subject to certain conditions