Perquisite of Motor Car Provided by the Employer Rule 3(2):-

• (i) Where motor car is owned or hired by the employer and is used wholly and exclusively in the performance of official duties, no perquisite arises provided specified documents are maintained.
• (ii) Where the motor car is owned or hired by the employer but used exclusively for private or personal purposes, the perquisite is the actual amount of expenditure incurred by the employer on running and maintenance including remuneration if any paid to the chauffeur. This is to be increased by an amount representing normal wear and tear of the motor car as reduced by any amount charged from the employee.
• (iii) Where motor car is used partly in performance of duties and partly for private or personal purposes. The perquisite is
       (a) Rs. 1800 (plus Rs. 900 if chauffeur is provided) if running and maintenance is borne by
            employer.
       (b) Rs. 600 (plus Rs. 900 if chauffeur is provided) where running and maintenance for private use is
            fully met by employee.
        The aforesaid amounts will be increased to Rs. 2400 (instead of Rs. 1800 and Rs. 900/-(instead of Rs. 600) where the motor car provided, has cubic capacity of engine exceeding 1.6 litres.
• (iv) Where employee owns a motor car but the actual running and maintenance charges (including remuneration of the chauffeur if any) are met or reimbursed to him by the employer and.
    (a) where the reimbursement is for use of vehicle for official purpose the perquisite will be nil.        
         However specified documents need to be maintained.
   (b) Where vehicle is used partly for official and partly for personal purposes, the perquisite is the actual amount of expenditure incurred by the employer as reduced by amount specified in above.

Read more: Perquisite of Motor Car Provided by the Employer Rule 3(2):- ~ Tds Tax India http://www.tdstaxindia.com/2011/06/perquisite-of-motor-car-provided-by.html#ixzz1Qp8g1p7b
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