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Value of Car for income tax purpose
06-30-2010, 10:51 PM
Post: #1
Value of Car for income tax purpose
What would be value of car for income tax purpose for employee?



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06-30-2010, 10:56 PM
Post: #2
 
Agar partliy for office use or partly for private use hay to 5% of car prise, ya faire market value ka 5%, ya agar rent par car li gai hay to rent amount taxable income may add ho gaye ga,

Agar sirf private use hay to 10% of car prise, ya faire market value ka 10%, ya agar rent par car li gai hay to rent amount taxable income may add ho gaye ga,
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07-01-2010, 05:12 PM
Post: #3
 
Thanks dear.

I want to discuss here that a company taken a car on lease for 1,000,000 (fair value).

100,000 was the security deposit.

As per lease agreement, the company has option to purchase the car against the security deposit of 100,000 (very low price compared to market) at the end of the lease term of 3 years or may get back its security deposit and car will be surrendered to lessor.

This option of purchasing is excercised almost by all the lessees.

My understanding is that the value of conveyance will be taken as 100,000 after the end of lease term instead of 1,000,000 as the company has acquired the car against 100,000 after the end of lease.

Plz comment.

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07-01-2010, 07:50 PM
Post: #4
 
“the fair market value of the motor vehicle at the commencement of the lease, if the motor vehicle is taken on lease by the employer”
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07-01-2010, 07:50 PM
Post: #5
 
????
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07-01-2010, 08:23 PM
Post: #6
 
Is ka matlaf saf saf ye hay k agar car lease par li jaye gi to jis din lease ka nafaz ho ga us din jo us car ki Fare market value li jaye gi, lease bayshk aap nay 100000 down paymint day kar karwai ho, par us car ki agar fare market value 800000 hay to ap value 800000 layn gay
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07-01-2010, 10:04 PM
Post: #7
 
Please read my earlier post again.Dont agree with this point of view.
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07-01-2010, 10:38 PM
Post: #8
 
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Star</i>
<br />Please read my earlier post again.Dont agree with this point of view.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

at the time of lease car ki fare market value agar 10,00,000/- thi to ap 10,00,000/- ka 5% ya 10% add karyn gay employee ki taxable income may
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07-02-2010, 03:47 PM
Post: #9
 
Dear the point which i am try to elaborate is that the car is not on lease NOW.

At the end of lease term, the lessor used to sell car against 10% security deposit to the lessee. I think this would be the acquisition price for lessee after the end of lease term.
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07-02-2010, 07:53 PM
Post: #10
 
Star bhai aap ka sawal may wakai samajh nahi pa raha hon, lease bhi khatam ho gai hay, to phir lessor or leassee ka taluk bhi to khatam ho jata hay, to kuch samajh nahi aa raha mujhay to. car dobara sell ho rahi hay , kon sale kar raha hay dobara lease ho rahi hay thora clear karyn na
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07-03-2010, 12:09 AM
Post: #11
 
ok i will be back with complete example.
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07-03-2010, 04:02 PM
Post: #12
 
Mr. Employee (an individual) appointed as sales manager in ABC Company. The company acquired a car on lease from Mr. Lessor on following terms on 01 June 2006 and provided to Mr. Employee. The fair value of car on the commencement of lease Rs. 1,000,000

• Initial deposit 10% Rs. 100,000
• Lease rental Rs. 30,000 per month in arrears
• Lease term of three years was ended on 31 May 2009.
• At the end of lease, Lessee had following options;
o To retain the car against security deposit initially deposited, or
o To get back its initial deposit and in this case lessee was required to return the car to lessor.

ABC Company decided to retain the car against the amount of security deposit.

Mr. Employee is required to file its income tax return for the tax year ended 30 June 2010. What would be the fair value of car for the purpose of income tax?

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07-03-2010, 08:12 PM
Post: #13
 
Star bhai may accountant nahi hon, is liye lease waghara ka itna concept nahi hay mujhay,, Sirf ye clear kar dayn k ye car aap ki company nay 3 sal k lye rent par li hay ya 3 sall ki instalment par purchase ki hay. Phir may calculation kar don ga.
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07-03-2010, 08:38 PM
Post: #14
 
Mery hisab say Company ABC 30000 monthly rent par car lay kar apny employee ko day rahi hay, is tarhan Company ki annual cost us car ki 360000 banti hay,

Ab agar partly for private & office use day rahi hay company car to 360,000 ka 5% yani 18,000 employee ki Annual taxable income may add ho jaye ga,

Agar only for private use day rahi hay company car to 360,000 ka 10% yani 36000 employee ki Annual taxable income may add ho jaye ga
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07-05-2010, 02:02 PM
Post: #15
 
Car is taken on lease.

Rule about value of conveyance is;

5% or 10% of

(a) the cost to the employer for acquiring the motor vehicle; or,

(b) the <b><u>fair market value</u></b> of the motor vehicle <b><u>at the commencement of the lease</u></b>, if the motor vehicle is taken on lease by the employer;



As you told the figure of annual value 360,000 is not correct as per my point of view.
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