New perk norms a relief for 2-wheeler owners

this should come as good news for two-wheeler owners. it has less to do with new models flooding the market, but relates more to the tax aspect and that too specifically with regard to the valuation of perquisites. this is in sharp contrast to many employees who have been hit hard by these new guidelines. under the new guidelines, there are provisions which require extensive documentation if the expense is to be shown as an official expense, such as a car. however, there are separate guidelines for owning an automotive conveyance other than a motor car, whose actual running and maintenance charges are reimbursed by the employer. in such a case, if the employee claims that the use of the vehicle is wholly and exclusively for official purposes, then a large number of documents have to be maintained to support this stand. this includes complete details of the journey, which may include date of journey, destination, mileage and the amount incurred thereon. in addition a certificate also has to be given which says that the expenditure was incurred wholly and exclusively for official purpose. but if the vehicle is used for both official and personal purposes then the situation changes. this has led to many employees realise that for once it is extremely profitable to tell the truth which is that the amount paid by the employer is for the use of the vehicle partly for official purposes and partly for private purpose. here the amount of perquisites would be the actual amount of expenditure incurred by the employer reduced by an amount of rs 600 per month. the best part is that there's no paperwork. this suits most of the employees fine because the monthly fuel cost is usually covered by the amount of rs 600 though in some cases it might exceed this amount. even where the expenses on two wheelers is more than the deduction permitted it is not much of a worry because the actual addition to income and tax is very negligible. under the earlier rules in force, in case a vehicle other than a motor car was owned by the employee and expenses paid by the employer then a reasonable proportion of the expenses were to be considered as perquisite. according to chartered accountants, the new rules seek to plug any issues that might arise on amount to be deducted but it imposes a high cost of compliance. but they agree that many employees are using this method to reduce the paperwork and at the same time ensure that they are not hit on the tax front.

New perk norms a relief for 2-wheeler owners

THIS should come as good news for two-wheeler owners. It has less to do with new models flooding the market, but relates more to the tax aspect and that too specifically with regard to the valuation of perquisites. This is in sharp contrast to man...

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