Whether perquisite tax applicable on purchase of company owened car?
I recently tried to buy a company owned car under auction. During this procedure, company has asked us to pay perquisite tax amount which is calculated based on perk value (Depreciation value of the car - auction price).
Now depreciation is 20% standard 'YoY' but based on car condition value of car is less, as per bid value I won the car less than depreciated value.
Weather perk tax is applicable for me? Because there is no actual benefit for me & I am going to use this car for my personal use. But perk I need pay 30% of perk value which is too big amount.
Please suggest me, whether I should pay perk tax?
If you buy car and there is gain, i mean value of car is less than market value in this case depreciated value what you earn is called profit in leiu of salary or perquisits.
You need to pay tax on this amount.