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Fuel Bill Claim

Tax Exemption on Car Allowances & Expenses Reimbursement
10%3%

Company offers car expenses reimbursement to its employees if these expenses are incurred for official duties. Car allowance income tax liability when owned by the employee is based on the purpose of use: private, official or both. Following points will help us understand taxability of car expenses when the employee owns the car and the expenses are reimbursed or borne by the employer.

vehicle expenses are reimbursed or borne by the employer and the vehicle is used solely for official purpose then such reimbursements will not be taxable. Following conditions must satisfy to claim these expenses: Employer should maintain proper records of journey, mileage, destination and the amount of expenditure Employer gives a certificate that the expenses reimbursed are wholly and exclusively for official use If the car is used wholly for private purpose then entire reimbursements paid are taxable.

if the car is used for both private and official purpose, then the taxable amount is calculated on the basis of the following formula:

Total amount spent or reimbursed by the employer

Less: Amount used for official purpose that is specified by Income Tax Act on the basis of cubic capacity*

Less: Any amount recovered from employee

Balance amount, if positive, is taxable to the employee

* Value used for the official purpose is calculated on the basis of the cubic capacity of a car.

If the cubic capacity of the car is below 1.6 liters i.e. 1600CC, expenses for use of the car are considered at the rate of Rs. 1,800/- p.m.

If the cubic capacity of the car is above 1.6 liters i.e. 1600CC, expenses for use of the car are considered at the rate of Rs. 2,400/- p.m.

If chauffeur is provided by the employer then the expenses claimed are restricted to Rs. 900/- p.m. Higher sum is permissible if transaction details like bank statements, payment vouchers etc. are available with the employer.

Generic Questions:

Check your Offer Letter containing the Salary Split up for more details.

If you are in Tax Slab 3 and you can save maximum of 12355.20/- with the Bills of Fuel, Driver Allowance Challan.

Yes, As of now we can claim only for CAR and the CAR has to be in Employee Name is mandatory, Some Companies doesnt check for Ownership Details.

We do provide the Fuel Purchase Computer generated bill with your vehicle number as per the month limit, which you can submit to get the exemption. Also we provide the driver allowance voucher which will add more benefits

We charge you 3% for the Fuel Bill Amount and 3% for driver allowance voucher which has driver licence details too. Driver allowance Voucher you need to get for 12 months in 1 shot.