🚗 Motor Car Perquisite – Major Revision under New Income-tax Act

 

Employer-provided car? Your taxable salary impact has changed significantly. Here is a clear comparison and taxpayer impact analysis:

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📊 Perquisite Value Comparison – Old vs New

Particulars	Old Income-tax Act, 1961 (Rule 3)	New Income-tax Act (Proposed)	Increase
Car < 1.6 litre engine	₹2,700 per month	₹8,000 per month	🔺 ₹5,300
Car > 1.6 litre engine	₹3,300 per month	₹10,000 per month	🔺 ₹6,700

👉 Increase of almost 3 times

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💼 What this Means for Taxpayers

Earlier (Old Act):

• Perquisite value was nominal

• Tax impact was minimal

• Employer-provided car was highly tax efficient

Now (New Act):

• Higher perquisite value

• Higher taxable salary

• Higher tax liability for employees

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🧾 Practical Example

If employee falls under 30% tax bracket

Earlier tax saved on perquisite:
₹2,700 × 12 × 30% = ₹9,720

Now tax saved:
₹8,000 × 12 × 30% = ₹28,800

🔺 Additional tax saved: ₹19,080 per year

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☕ Professional Advisory

If you are receiving a company car, it is advisable to review your salary structure for tax optimisation.

For personalised tax planning assistance:

📞 +91 77602 52581