Hi,
Seek your valuable inputs. Thanks for taking time to read this.
Situation: I have a company leased car. I pay for the car monthly (EMI of
28K from pre-tax salary). The understanding when I leased the car in Feb 2007 was that I can own the car at the end of lease period (3 years) by paying residual value (10%). In my case that turns out to be 65K. It was all fine till the Govt came up with the abolition of FBT few months back.
Our finance dept is coming back saying that, I can no longer get the car at 65K. Indeed they are saying I might have to pay about 1 Lakh tax (that too before end of March 31). I am now faced with 2 options:
1. Ask the company to take the car and I do not want to pay 1.65 lakhs for a 3 year old car.
2. Pay the 1.65 lakhs thereby pretty much nullifying whatever benefit I got by going for a company leased car.
This whole experience is painful because I am convinced our finance dept is not interpreting the law correctly or the tax dept is at fault. They cannot apply rules retrospectively as I would have never gone for the lease if I knew I would be liable for 1 lakh tax in 2010.
Seek your valuable inputs. Thanks for taking time to read this.
Situation: I have a company leased car. I pay for the car monthly (EMI of
28K from pre-tax salary). The understanding when I leased the car in Feb 2007 was that I can own the car at the end of lease period (3 years) by paying residual value (10%). In my case that turns out to be 65K. It was all fine till the Govt came up with the abolition of FBT few months back.
Our finance dept is coming back saying that, I can no longer get the car at 65K. Indeed they are saying I might have to pay about 1 Lakh tax (that too before end of March 31). I am now faced with 2 options:
1. Ask the company to take the car and I do not want to pay 1.65 lakhs for a 3 year old car.
2. Pay the 1.65 lakhs thereby pretty much nullifying whatever benefit I got by going for a company leased car.
This whole experience is painful because I am convinced our finance dept is not interpreting the law correctly or the tax dept is at fault. They cannot apply rules retrospectively as I would have never gone for the lease if I knew I would be liable for 1 lakh tax in 2010.