Ness Wadia college of Commerce

Name: Shambhavi Kunal Dhagdhage

Class: SYBBA
Roll.no:125
Teachers name: kirti Sethi
College name: Ness Wadia College of Commerce,
Pune
University name: Savitribai Phule Pune University
 TOPIC 1

DEMONTRATE THE
NETWORK AND PRESENCE
OF IT (INCOME
TAX)AUTHORITIES IN
MAHARASHTRA REGION.
 OBJECTIVES OF THE
PROJECT
To understand what is Income tax
authorities
How is the presence of Income tax
authorities
What does Income Tax authorities
comprise of.
 TOPICS COVERED UNDER THIS:
Introduction to Income Tax authorities
Various Authorities
Power of these authorities
How and when does these authorities
work.
 WHAT IS INCOME TAX AUTHORITIES

“Income tax authority” means a Commissioner, a

joint Commissioner ,a director , a Joint Director,
An assistant Director or Deputy Director or an
Assessing Officer, or a Tax Recovery Officer , and
for the purpose of clause (i) of subsection (1),
clause(i) of subsection(3) and subsection (5),
includes an inspector of income tax .
 VARIOUS AUTHORITIES
Section of Income Tax Act 1961 provides for
administrative and judicial authorities for
administration of this Act. The Direct Tax Laws
Act,1987 has brought far-reaching changes in
organizational structure. The change in
designation of certain authorities and creation of
certain new posts in the structure are the main
features of amendments made by Direct Tax Laws
Act 1987 .
1.Administrative [Income Tax Authorities] [Sec. 116]

a) The Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of
1963),
b) Directors-General of Income-tax or Chief Commissioners of Income-tax,
c) Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals):
*(cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional
Commissioners of Income-tax (Appeals),
*(cca) Joint Directors of Income-tax or Joint Commissioners of Income-tax.
d)Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of
Income-tax (Appeals),
e)Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,
f) Income-tax Officers,
g) Tax Recovery Officers,
h) Inspectors of Income-tax.

2.Assessing Officer [ Sec. 2(7A)]

"Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or
Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions
or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and
the Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to
exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer
under this Act;
3.Appointment of Income-Tax Authorities [ Sec. 117 ]

*Power of Central Government : The Central Government may appoint such persons as it
thinks fit to be income-tax authorities. It kept with itself the powers to appoint authorities up
to and above rank of an Assistant Commissioner of Income-Tax [ Sec. 117 (1) ]
*Power of the Board and Other Higher Authorities :  Subject to the rules and orders of
the Central Government regulating the conditions of service of persons in public services
and posts, the Central Government may authorize the Board, or a Director-General, a Chief
Commissioner or a Director or a Commissioner to appoint income-tax authorities below the
rank of an Assistant Commissioner or Deputy Commissioner.  [ Sec. 117 (2) ]
*Power to appoint Executive and Ministerial Staff :  Subject to the rules and orders of the
Central Government regulating the conditions of service of persons in public services and
posts, an income-tax authority authorized in this behalf by the Board may appoint such
executive or ministerial staff as may be necessary to assist it in the execution of its
functions.

4.Control of Income-Tax Authorities [ Sec. 118 ]

The Board may, by notification in the Official Gazette, direct that any income-tax authority
or authorities specified in the notification shall be subordinate to such other income-tax
authority or authorities as may be specified in such notification.
 REGION WISE INCOME TAX COMMISSIONER OF
MAHARASHTRA

Geographically, historically , politically , and according to cultural

sentiments Maharashtra has been divided into 5 regions namely:
1. Pune (West Maharashtra)
2.Khandesh (Nashik division)
3.Marathwada (Aurangabad division)
4.Kokan (kokan division)
5.Vidarbha( Nagpur and Amravati division)

REGION INCOME TAX COMMISIONER

Pune(West Maharashtra) Chavvi Anupam
Khandesh (Nashik division) J m Sahai
Marathwada (Aurangabad S.K. Bhagat
division)
Kokan (Kokan division) Sri Navin Kumar
Vidarbha (Nagpur and Ruby Srivastava
Amravati
 HOW IS THE PRESENCE OF INCOME TAX AUTHORITIES IN
MAHARASHTRA REGION : INCOME TAX RAID , SEARCH AND
SEIZURE- WHAT WHEN AND HOW ???
‘Search and survey operations’ are conducted by the Income Tax Department, also called as raids,
when they suspect an individual or business to have hoarded illegal money. The aim of Income Tax
department is to remove black money or income from illegal sources .The Income tax department goes
for a sudden inspection at the suspects place . Out of all the viable ways to curb illegal wealth, income
tax raids have been the most successful one.
When does a raid happen
An income tax raid, technically known as the process of Search and Seizure, is one of the crucial
weapons that the Income-tax department possesses to check black money. It is a measure that is known
to be constitutionally valid too. A raid gets triggered under any of the following circumstances:
*Credible information of tax evasion; for instance, any evasion coming out of reports received from
the Intelligence Wing of the Income tax department.
*Information coming from government departments.
*Information procured from assessment records of taxpayers.
*Information received with regard to spending being disproportionate to income of the taxpayer i.e. an
instance of lavish spending without corresponding income to match the same.
*Manipulation of books of accounts, vouchers, invoices etc.
*Illegal investment in real estate.
*Unexplained cash credits, share transactions etc.
 Who can conduct a raid
According to Section 132(1) of the Income Tax Act, the
1.Principal Director General or Director-General, or
2.Principal Director or Director, or
3.Principal Chief Commissioner or Chief Commissioner, or
4.Principal Commissioner or Commissioner

Powers of tax authorities during a raid

The officer authorized to carry out the raid can:
1. Enter and search any building, place, etc. where he has a reason to suspect that
the books of account, other documents, money, bullion, jewellery or other
valuable article or thing representing undisclosed income is kept.
2.Break open the locks, where the keys are unavailable.
3.Carry out personal search of a person who is suspected to have secreted some
item as mentioned in (1) above.
4.Seize the items as mentioned in (1) above.
5.Place marks of identification and take extracts or copies of the books of accoun
and other documents.
6.Make a note or inventory of the valuables found during the search.
 CONCLUSION
Income Tax authorities play a vital role
in removing black money or illegal
money by keeping a close eye on
suspects .They have the power to inspect
the suspects place suddenly and check all
the income related documents .
Income Tax authorities Practice Income
Tax Raid , search and seizure and other
such operations.
WHAT I LEARNT FROM THIS
PROJECT:
What is income Tax authorities
What does Income Tax authorities
comprise of.
How Income Tax department
functions
Powers of Income Tax authorities
Importance of Income Tax
authorities
 TOPIC 2

Practical calculation of the

amount of deduction allowed and
taxable amount for motor car
facility through an example .
 OBJECTIVES OF THE
PROJECT
To understand the basic principles of
motor car facility
To gain knowledge on how to calculate
the taxable amount and deductable
amount under motor car facility.
To understand how perquisites are
helpful to both employer as well as
employee.
 Topics covered under this:
Introduction
Rules for motor car
 Two situations under motor car facility:
Case 1 When car hired by employer
Case 2 When car hired by employee
Two situations when motor car is hired by employer:
If maintenance expenses are borne by employer
If maintenance expense are borne by employee
Case 2When car is hired by employee
Maintenance expenses are borne by employer
Maintenance expense are borne by employee.
If more than one motor car is provided by employer
 Introduction
Every salaried individual along with salary for their services
provided to the employer, look into get additional benefits or
amenities provided in kind by the employer free of cost or at
concessional rate , known as perquisites{also known as Perks}

Motor car facility is one of the perquisites and computing taxable

value of this worries almost both the employees as well as employer.
Valuation of perquisites in respect of motor car i.e., the car may be
owned by you(employee) or the employer.
Generally ,this kind of perquisites is provided to senior employees of
the organization. The taxability of perquisites is covered under Rule 3
of Income Tax rules 1962.
 RULES FOR MOTOR CAR FACILITY

We can see this generally that company is providing cars to its

employees for doing official duties. These cars are generally
provided by employer of the company to employee . Cars are used
for both official as well as for personal purpose.
Motor car facility provided by employer is included in the income
under head ‘Salaries’ under section 17(2)(iii) [Rule 3{2}]
Motor car is perquisite and perquisites are part of taxable income
subject to the provisions of act.
 There are two situations under the motor car facility:

CASE 1 When the motor car is hired/owned by employer

CASE 2 When the motor car is hired/owned by employee

Again there are 2 cases when the Motor car is
owned by employer :

A)If the maintenance and running charges are

met by employer

B)If the maintenance and running charges are

met by employee
 CASE 1
WHEN CAR IS OWNED BY EMPLOYER :
a)If maintenance charge is borne by employer

1. If the car is used wholly for official purposes – Not a perquisite, hence not
taxable.
2. If the car is used wholly for private purposes –
step 1 Find out actual expenditure incurred by the employer [i.e., expenditure on
running and maintenance including remuneration of the chauffeur plus normal
wear & tear of the car (@ 10% p.a of actual cost to the employer) or hire charges
if car is taken on hire]
step 2 Less: Amount recovered from employee.
Balancing amount is taxable value of the perquisite.
3.If the car is partly used for official purposes and partly for private purposes
A sum calculated @ of Rs. 1,800 per month where the cubic capacity of the
engine does not exceed 1.6 liters or Rs.2,400 per month if such capacity exceeds
1.6 litres and Rs. 900 per month if chauffeur is provided (Nothing is deductible
in respect of any amount recovered from the employee).
 WHEN CAR IS OWNED BY EMPLOYER:
b)If maintenance charge is borne by employee
1. If the car is used wholly for official purposes – Not a perquisite, hence not taxable.
2.If the car is used wholly for private purposes –
step 1 Find out expenditure incurred by the employer (i.e., hire charges if car is taken on
rent or normal wear & tear @10% p.a of actual cost of the car if the car is owned by the
employer plus salary of the chauffeur, if any, paid or payable by employer).
step 2 Less: Amount recovered from employee.
Balancing amount is taxable value of the perquisite
3.If the car is partly used for official purposes and partly for private purposes and
maintenance in respect of private use is borne by the employee.
A sum calculated @ of Rs. 600 p.m where the cubic capacity of the engine does not
exceed 1.6 litres or Rs.900 p.m if such capacity exceeds 1.6 litres and Rs. 900 per month
if chauffeur is provided (Nothing is deductible in respect of any amount recovered from
the employee

OTHER POINT
Car facility between office and residence : The use of motor car by an employee for the purpose of going from
residence to the office or from office back to residence, is not chargeable to tax at all.
Monthly calculation as said above is to be calculated on completed month and a part of the month is left out of
consideration.
DIAGRAMATIC PRESENTATION OF CASE 1 : When car is hired/owned by employer
a)If maintenance charges are borne by employer
b)If maintenance charges are borne by employee
 CASE 2
WHEN CAR IS OWNED BY EMPLOYEE
When car is owned by employee and the related expenses are also met by employee
then it is not taxable if specified documents are maintained .
And if maintenance and running expense are met or reimbursed by employer then
taxability depends on purposes for which car has been used.
1. If car is used fully for official work- Not a perquisite ,hence not taxable .
2. If car is used fully for personal purpose-
Step 1: Find out actual expense incurred by employer
Step 2 : Less Amount recovered from employee
Balancing amount is taxable value of the perquisite .
3.If car is partially used i.e., personal as well as official work:
Step 1: Find out actual expense incurred by employer
Step 2:Less- amount used for official purpose (sum calculated @Rs1800p.m. If cubic
capacity of engine is less than or 1.6 litre OR Rs 2400 p.m. If cubic capacity of
engine is more than 1.6 litre and if chauffer is provided addition Rs 900 p.m. .
Step 3: Less- Amount recovered from employee{if any}
Balancing amount is taxable value of perquisite.
Diagrammatic PRESENTATION OF CASE 2: When car is
hired/owned by employee
a)If charges are borne by employer
b)If charges are borne by employee
 In case when employer
provides more than one motor
car
If the employer has provided more than one motor
car for official as well as personal use ,in such a
case ,only one car shall be considered to be used
for official /personal purpose and all other cars
shall be considered to be used for personal purpose
.
 PRACTICAL QUESTIONS:
CASE 1(i)
WHEN CAR IS HIRED BY EMPLOYER AND EXPENSES ARE ALSO MET BY
EMPLOYER
Q1. Mr. Himanshu is an employee at Gesco Ltd. His basic salary is Rs.70,000p.m.
He is been provided with Mercedes Benz car (2500 cc) by the company .
The following expenses are paid by company :1.Car cost : Rs 60,00,000
What is the taxable amount if car is used for :1.Official work 2.Personal work 3. Partly official and
personal work.
ANS :
Official purpose Amount (in Rs)
Basic salary(70,000*12) 8,40,000
Motor car perquisite (Fully exempted) 0
INCOME FROM SALARY 8,40,000
Personal purpose Amount(in Rs)

Basic salary (70,000*12) 8,40,000

Motor car perquisite :Dep on car (60,00,000*10%) 6,00,000

INCOME FROM SALARY 1,44,0000

 Continued….
Partly official partly personal Amount (in Rs)

Basic salary(70,000*12) 8,40,000

Motor car perquisite

Car + Expense 28,800
(2400*12)

Driver salary 0

INCOME FROM SALARY 8,68,800

Note: we will add Rs 900*12 =10,800 if chauffer is

provided given in question. Then the answer
would become 8,40,000 + 28,800 + 10,800
=8,79,600)
 CASE 1(ii)
WHEN CAR IS HIRED BY EMPLOYER AND EXPENSES ARE BORNE BY EMPLOYEE
Q2. Mr. A is an employee at ATLAS Ltd .He is been given basic salary of Rs 75,000 p.m. Also he is
been provided by a car by his employer but the expenses are not borne by employer. The engine
capacity of car is 1.5cc . Car cost is rs5,00,000. Also driver is been provided with salary of
Rs45000.Calculate the taxable amount if used for (i) Only official work (ii) only personal work
(iii) both official and personal
Ans: Official work Amount (Rs)

Basic salary(75,000*12) 9,00,000

Motor car perquisite 0
INCOME FROM SALARY 9,00,000

Personal purpose Amount (Rs)

Basic salary75000*12 9,00,000
Motor car perquisite
5,00,000*10% 50,000

INCOME FROM SALARY 9,50,000

 Continued...
Partly official partly personal Amount (Rs)
work

Basic salary75,000*12 9,00,000

Motor car perquisite(1.5cc) 7200

600*12

Driver provided 900*12 10800

INCOME FROM SALARY 9,18,000

 CASE 2(i)

WHEN CAR IS HIRED/OWNED BY EMPLOYEEE BUT EXPENSES ARE BORNE

BY EMPLOYER.
Q3. Ms.Sneha is employee at Denso Ltd Delhi Her basic salary is Rs50,000. She
owns a car and expenses are borne by employer. (i)Diesel:Rs40,000 (ii)Drivers
salary: Rs 60,000 (iii)Maintenance expense : Rs30.000
Calculate taxable amount if used for 1. official 2. personal 3. partly official
partly personal
Ans: Personal purpose Amount (in Rs)
Official work Amount (in RS) Basic 6,00,000
salary(50,000*12)
Basic salary 6,00,000
(50,000*12) Motor car perquisite
Amount paid by
Motor car 0 company: 40,000
perquisite(fully Diesel 30,000
exempted Maintenance 60,000
INCOME FROM 6,00,000 expense
SALARY Driver salary
Total 1,30,000
INCOME FROM 7,30,000
SALARY
Continued...
Both official and Amount (in Rs) Total amount (Rs)
personal work
Basic 6,00,000 6,00,000
salary(50,000*12)
Motor car
perquisite
All expenses borne 1,30,000
by employer
Less (21600)
Car +
expense(1800*12)
Driver (10800)
salary(900*12)
Motor car 1,30,000-21600- 97,600
perquisites 10800
INCOME FROM 6,97,600
SALARY
 CASE 2(ii)
WHEN CAR IS HIRED/OWNED BY EMPLOYEE AND
EXPENSE ARE MET BY EMPLOYEE HIMSELF:
Q4. Mr. Karan is an employee at Forex Ltd .His basic salary is 65,000p.m. He owns a
Toyota car (1.8cc).Also there is chauffer whose salary is Rs 50.000. It is given that all the
expenses are borne by Karan . Calculate the taxable amount if car is fully for official work
, Partly official and partly personal purpose , Fully personal work.
Ans:

Official work No perquisite value

Partly official and partly No perquisite value

personal

Fully personal work No perquisite value

 CONCLUSION
Motor car facility is one of the perquisite and taxable value of this
facility worries almost both the employee and employer .Valuation of
motor car perquisite in respect of motor car depend on ownership of
that motor car :
1.Car hired by employer and expense paid by employer
2.Car hired by employer and expense paid by employee
3.Car hired by employee and expense paid by employer
4.Car hired by employee and expense paid by employee
Taxable amount also depends on other factors like whether there is
chauffer , engine capacity i.e., (up to 1.6 litre and more than 1.6 litre)
WHAT I LEARNT FROM THIS PROJECT
 What is motor car perquisite
 What are the conditions under motor car
perquisite
 Motor car facility Rule 3(2)
How Taxable amount is calculated under
different conditions:
 used fully for official purpose
 Used fully for personal purpose
 Used partially i.e., for official as well as
personal purpose
THANK YOU!!!