Use and transfer of moveable assets of the employer â€“ Taxability

Direct Taxes (including International Taxation) | By ALOK PATNIA | Last updated on Oct 5, 2017

Perquisites are the non-monetary benefit provided by the employer to his employees in addition to the salary. It plays a vital role in the total tax outgo of the employees. Employer provides assistance to the employee in respect of use or transfer of moveable assets which is a perquisite taxable in the hands of the employees. The value of such benefit resulting from the use or transfer of any such moveable assets belonging to the employer directly or indirectly to the employee or any member of his household shall be determined as under:

In case of use of any moveable assets

*Circumstances*	*Value of benefit*
(i) Use of computer & laptops	Nil
(ii) Moveable assets-
Other than laptop or computer	10% per annum of the actual cost of such assets
Assets already specified in the rules	The amount of rent or charges paid or payable by the employer.

In case of transfer of any moveable assets

*Assets transferred*	*Value of benefit*
(i) Computers & electronic items	Actual cost of such assets to the employer as reduced by 50% of the cost to the employer for *each completed year,* on the basis of *reducing balance method,* during which such asset was put to use by the employer.
(ii) Motor Cars	Actual cost of such assets to the employer as reduced by 20% of the cost to the employer for *each completed year,* on the basis of *reducing balance method,* during which such asset was put to use by the employer.
(iii) Any other assets	Actual cost of such assets to the employer as reduced by 10% of the cost to the employer for *each completed year,* on the basis of *straight line method,* during which such asset was put to use by the employer.

The value of benefit mentioned above shall be reduced by the amount paid or recovered, if any, by the employee being consideration for such transfer.

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In case of use of any moveable assets

*Circumstances*	*Value of benefit*
(i) Use of computer & laptops	Nil
(ii) Moveable assets-
Other than laptop or computer	10% per annum of the actual cost of such assets
Assets already specified in the rules	The amount of rent or charges paid or payable by the employer.

In case of transfer of any moveable assets

*Assets transferred*	*Value of benefit*
(i) Computers & electronic items	Actual cost of such assets to the employer as reduced by 50% of the cost to the employer for *each completed year,* on the basis of *reducing balance method,* during which such asset was put to use by the employer.
(ii) Motor Cars	Actual cost of such assets to the employer as reduced by 20% of the cost to the employer for *each completed year,* on the basis of *reducing balance method,* during which such asset was put to use by the employer.
(iii) Any other assets	Actual cost of such assets to the employer as reduced by 10% of the cost to the employer for *each completed year,* on the basis of *straight line method,* during which such asset was put to use by the employer.

The value of benefit mentioned above shall be reduced by the amount paid or recovered, if any, by the employee being consideration for such transfer.

Please contact us, we are here to solve all your tax issues !

Alok Patnia

Founder and Director at Taxmantra.com

One thought on “Use and transfer of moveable assets of the employer â€“ Taxability”

Hi,

I have queries on tax perquisite for cars. I see the perquisite value is 2700/month for 1600cc chauffer driven car owned by employee. in my company they said i have pro rated eligibility of 60000 (fuel) , 60000 (driver) and maintenance of 34000.
so what does these amounts mean and what is 2700 perquisite.

is it that if i avail benefit upto 60000 say for fuel then 21600 will will be added to my taxable income instead of 60000. say if i am submitting a bill of 21600 then is it going to be nil. or how is it calculated. what does perquisite getting added to ur taxable income means. pls clarify.