Draft Income Tax Rule 2026
If you are a salaried employee and use a company car, you may now have to pay more tax. Many such changes have been proposed in the Draft Income Tax Rules 2026, which will impact the working employees. If Parliament approves these draft rules without any changes, then employees who get a company car and also use it for personal purposes will have to pay higher income tax.
According to the calculations, on an annual salary of Rs 25 lakh, about Rs 8,387 more tax will have to be paid. Similarly, on a salary of Rs 15 lakh, it can be Rs 4,352. This calculation is as per the new tax regime, because the tax on perks is not affected by the old or new tax regime.
How much tax is there on using company car?
According to experts, if the company provides a car to the employee for both office and personal use and also bears its fuel-maintenance expenses, then the taxable perk has been fixed at Rs 5,000 per month. If a driver is also provided with the car, then another Rs 3,000 per month is added to it. That means the total taxable perk will be Rs 8,000 per month or Rs 96,000 per year, which will be added to the taxable salary of the employee.
What does the rule say?
Experts say that Rule 15 of the Income Tax Rules 2026 (which is equivalent to Rule 3 of 1962) tells how the price of the facilities provided to the employee will be decided. The new tax regime may give a lower tax rate and eliminate most exemptions, but the method of determining the value of perks does not change. Choosing either the old or new tax regime will not affect the value of the perk. The method of calculation will be the same in both.
What will change on motor car perk?
There is a proposal to change the value of motor car perk in Rule 15 of the Draft Rules 2026. For example, if the car is used half for office and half for personal work and its expenses are borne by the company, then the perk value will be Rs 5,000 per month for a car with engine capacity up to 1.6 liters and Rs 7,000 per month for a car with engine capacity more than 1.6 liters. If a driver is provided, Rs 3,000 more per month will be added. Under current rules, this amount is fixed at Rs 1,800 or Rs 2,400 per month and Rs 900 for the driver.
On the other hand, if the company pays for the car, then as per the proposal, there will be a perk value of Rs 2,000 per month on cars with engines up to 1.6 liters and Rs 3,000 per month on cars with engines above 1.6 litres. Apart from this, Rs 3,000 per month will be added for the driver. In the old 1962 rules, this amount was Rs 600, Rs 900 and Rs 900 per month respectively.
Also read- Strong roar of Tata Sierra, so many vehicles sold in 1 month, increased tension of Creta-Seltos
