Vehicle Lease Policy - One India

This Vehicle Lease Policy (‘Policy’) aims to provide the employees who are provided a vehicle by Microsoft
India, with all the necessary information for correct and responsible conduct and for compliance with the
legal regulations governing this company benefit.

The Policy will be subject to regular review, and Microsoft India may at any time amend the provisions of
this car Policy if the amendments are reasonable for the employee; under consideration of the interests of
Microsoft. The employee will be notified of amendments in due time.

Eligibility Guidelines

All full-time employees (FTEs) in Microsoft India are eligible to avail the car lease benefit under this Policy.
Company-leased cars shall be provided to the employees for both personal and official purposes. However,
Microsoft India may at its sole discretion decide not to provide the company leased cars to specific
employee(s) or to add additional employees to the Policy.

Microsoft is taking cars on lease from the following vendors:

 Clix Capital Review details and overview of processes with GE as Financer. (The new lease
initiation with this car leasing company is on hold currently)
 Sundaram Finance Limited Review details and overview of processes with Sundaram as Financer.

Employee Undertaking

As per the lease Policy, the employee is required to fill in the Employee Undertaking-New Car Lease
document, if opting for a leased vehicle. A scanned copy of the filled and signed document is to be
uploaded to the share point here.

Refer to the Step by Step Guide for Instructions and guidelines to fill the undertaking form.

Lease Tenure Options

Employees who choose to avail the car lease benefit under this Policy have an option of availing the lease
for a tenure of 36 months or 48 months. The tenure cannot be changed mid-way through the lease term.
The employees can choose one of two lease tenure options.

In order to check the rental, please check with the concerned vendor directly.

Lease Rental Guidelines

Employees would need to select a car under this Policy so that the lease rent per year for the car is equal to
or below 25 percent of the employee's base salary. The base salary referred to is the base salary at the start
of the Vehicle Lease Agreement. The lease rent cap is not altered if the base salary is revised after the
Vehicle Lease Agreement is in force. The employee is responsible for VAT on lease rentals.

The lease rentals are subject to variation at any time during the tenure of the lease in the event of a change
occurring in the parameters on which the lease rentals are computed, namely, variables relating to the
depreciation rate of the leased asset, residual value of the car, the corporate tax rate applicable to the
Lessor (the Financier) under the Income-tax Act, 1961 the Service Tax rate, and the provisions or variations
in the cost of funds to the lessor.

Residual Value

To know how the residual value of the car would be calculated at the end of the lease tenure reach out to
the specific Financer.

Note: Employees cannot negotiate the terms and conditions of the contract agreement between Microsoft
India and the Lessor.

Limits

Employees who use a car under this Policy are eligible to claim reimbursement of car maintenance
expenses. The eligible maintenance amount is prorated effective the month the employee avails the benefit
under this Policy during the year. The amount that an employee can claim for reimbursement for car
maintenance is based on his / her stock level and is determined as shown in the following table for each
financial year (April to March).

Stock levels Maintenance amount

Level 57 and below INR 200,000
Level 58 and above INR 300,000
Employees would be reimbursed the car maintenance expenses based on actuals every month on
submission of bills.

The perquisite value of the car would be added to the taxable salary of the employee in accordance with the
provision of Income tax Act, 1961 read with Income tax Rules, 1962.

Maintenance Claim Process

Vehicle Maintenance Checklist: Refer to the checklist of components that can be submitted under vehicle
maintenance, to claim tax benefit

Employees can claim reimbursement of car maintenance expenses subject to the declaration of amounts in
the EY Payroll-MySpace Tool, and the submission of original proofs. Proofs are to be dropped off in the EY
Drop Boxes.

EY India Payroll-My Space User Guide provides step by step guidance to navigate through all the actions
available on the EY Payroll-MySpace Tool.

Note: Maintenance amount is a component of the Flexible Basket of Allowance. Employees are to allocate
the maintenance amounts under as part of your flexible salary structure break-up plan to the eligible for
benefit, and should update the EY Payroll-MySpace Tool. Retro allocation of vehicle maintenance amount
is not permissible.

Rights and Obligations of the Employee

The use of the company-leased car without a valid driver's license is prohibited. The employee must
immediately notify AskHR if his or her driver's license is temporarily or permanently revoked. A
revocation of the driver's license, even on a temporary basis, entitles Microsoft India to revoke the
permission to use the company car. Microsoft India requests that the employee, at all times, can submit
proof of a valid driver's license.

The company-leased car cannot be rented, lent, pledged, and used for purposes of a sideline occupation
or for commercial purposes of third parties or for any motor sports events.

The employee must leave the company-leased car locked at all times, when the said car is not in use. Any
theft, damage, or loss of the company leased car shall be reported to the police immediately and the
Lessor must be informed in writing. The employee must comply with all traffic regulations. This
obligation shall apply toward Microsoft India as well.

The employee shall bear all administrative fines, fines, and other penalties for any violation of the traffic
regulations.

Accidents/Damages/Insurance

Employees are responsible for purchasing the insurance for the company-leased car. It is the employee's
responsibility to ensure that the company-leased car is covered by an appropriate insurance cover at all
times.

In the event of accidents, irrespective of who is at fault or of any consequences under criminal law, the
police shall be notified. After an accident the employee should immediately inform AskHR. The employee
is liable for any damage to the company-leased car or to any other person(s) and property involved in
the accident.

Liability of Employee

The employee is liable for all damages caused by intent or gross negligence.

Note Gross negligence exists if the employee violated the required diligence to a particular extent. This
includes in particular the driving of the company-leased car under the influence of alcohol, drugs,
traveling at an unreasonably high speed, running red lights, using cell phones, refueling with the wrong
type of fuel, failure to secure the parked car, accidents caused by insufficiently cleaned windows, and so
on. This list is indicative and not exhaustive.
Third Party Use

Before permitting any third party (for example, family members, driver) to use the company-leased car,
the employee must verify that the third party holds a valid driver's license.

Income Tax impact of Vehicle Lease

The vehicle is provided to the employee for both personal and official purposes. As per Rule 3 of the
Income-tax Rules, 1962, the taxable value of company-leased cars would be taxable in the hands of the
employee based on the cubic capacity of the vehicle as follows:

 For vehicles with cubic capacity less than or equal to 1.6 liters, INR 1,800 per month would get
added to the employee’s total taxable perquisites
 For vehicles with cubic capacity exceeding 1.6 liters, INR 2,400 per month would get added to
employee’s total taxable perquisites
 In case the driver's salary is being claimed by the employee, INR 900 would additionally get
added to employee’s total taxable perquisites