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+--- Thread: Value of Car for income tax purpose (/thread-value-of-car-for-income-tax-purpose)
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- LapTop - 07-05-2010
Star bhai,,,
Ap k case may Rule (a) the cost to the employer for acquiring the motor vehicle, apply ho ga, kyon k aap ki company rent par car hasil kar rahi hay,,,,, ab aap chahy is ko lease bolyn ya rental lease is ki nature nahi badly gi,,,, is payment ki nature hi ye hay k ye rent amount hay.
Rule (b) may jo lease hay us say murad hay k aap downpayment day kar instalment par car purchase kar rahay han, is sorat may aap Fair market value layn gay.
- Star - 07-08-2010
In leasing, you acquire the right to use the vehicle not the ownership of vehicle during the life of lease against lease rentals. I understand;
DURING THE LEASE TERM fair value of vehicle at the commencement of lease shall be cosidered as value of conveyance for income tax purpose of employee.
WHEN LEASE PERIOD IS ENDED, you have "option to acquire the OWNERSHIP of vehicle against nominal price" (known as bargain purchase option). After excercising this option, this nominal price becomes your purchase price of vehicle and i understand that this price should be considered as fair value of conveyance for income tax purpose of employee.
Regards,
*
- Star - 07-14-2010
?
- LapTop - 07-14-2010
Star bhai ye ? mark kyon laga diya aap nay
- Star - 07-14-2010
Mark is placed to get your input after reading of ealier post about leasing.
- LapTop - 07-14-2010
Star bhai ko or sawal lao yar , may to bore ho gya hon is sawal say.
- faisal_desperado - 07-15-2010
Dear,
The said transaction has two fold effect, company has to account for the same transaction in different way and employee will have different effect, and these may not be complected with each other.
Since, you are seemed to be concerned with employee; notwithstanding any other section with regard to the said transaction in the ordinance, this will be treated as a perquisite to the employee and 10% or 5% , based on the condition, of the fair market value at the commencement of lease will be considered for the purpose of ascertaining the annual worth of the perquisite, and this will be regardless of what has been(will be) the cost to the employer.
Furthermore, if the employee has some annual contribution toward the realization/compensation of the said vehicle, then the same will be deducted from the annual value of perquisite to arrive at the taxable worth of perquisite of the employee.
Should you have any query, in this regard, let me know through email.
Best Regards,
Faisal.