Company Car Policy
The objective of company provided car is to provide the convenience of commutation for official & personal purpose.
The cars will be on lease with a third party Service Provider
- For the purpose of providing an ease in commutation facility Wipro offers its employees a benefit in form of Car Lease option.
- Car lease option is available only for 2/3/4/5 years
- The EMI limit under this scheme cannot exceed 75% of your WBP
- Company has tie ups with 4 different vendors to choose from for the purpose of lease financing
Advantage of Car Lease option
1. Lower rentals as compared to EMI
Usually rentals charged under the lease option is usually lower as compared to the EMI. Thus the savings on the EMI can be either channelized for any other need or invested.
2. No Downpayment required
In case of car purchase a minimum amount is required as downpayment, whereas in case of leasing option such downpayment is not required. Thus it provides an opportunity to earn interest in the amount which otherwise would had been paid as downpayment in case of car loan
3. Taxation Benefit
The rentals paid under car lease option are tax deductible which will help to reduce the overall tax outgo. Whereas in case of car loan the EMI’s are not tax deductible, thus there is no tax benefit available
4. Can be used for official as well as personal purpose
5. Salary paid to driver can be claimed as an expenses
6. Regular expenses incurred on running and maintenance of the vehicle can be claimed as expenses in case of Car leasing under WBP, whereas the same benefit is not available under car loan option.
Following expenses can be claimed as Car Running & Maintenance Expenses – Fuel expenses, regular maintenance, taxes, insurance & car cleaning expenses
Disadvantages of Car Lease option
1. Perquisite Tax applicable
As per the taxation law, car lease benefit is considered as perquisite and will attract a Perquisite Tax depending on the engine capacity of the car, for example Rs. 1800 p.m. tax if the engine capacity is less than 1.6 ltrs.
2. Tax on Driver Facility
If you have availed driver facility then the same will be taxed Rs. 900 p.m. as a part of perquisite tax
In order to compare the benefits from Car Lease and Car Loan please click here