How Employees Save 40% on Car using Tax Laws | Detailed Explanation by CA Sahil Jain

[@TaxationWithCASahilJain]

The figures I've shared in the video are straight out of the Car Leasing Program of a company in the real world. Big corporates keep a certain portion of your payout as "Flexible" which you can choose to take as HRA or Car Lease Reimbursement or LTC etc. This is how salary structuring happens in real life which results in savings of lacs. Hope this was a little insightful for you all. Happy learning ♥

[@ConsultantTejasShar-tp7ms]

What if we leave the company in between?

[@shaggyd4554]

what if the employer does not provide you this option

[@chichi-wy2ku]

​@@ConsultantTejasShar-tp7ms bro sir already addressed your query in this video, company does hypothecation incase employee tries to sell the vehicle or leave the job, if this happens company can take back its car. Hypothecation gives right to company to take back the asset even if company is not owner.

[@aditrajgautam8904]

is the residual value of car is fixed at 5% for 3 years lease period or it can vary company to company, as my company charges 25 % which seems much higher than stated in video?

[@_chirag_agarwal500]

Not little , very insightful

[@vivekjain9944]

dear sahil sir , you are one of my most fav teacher who explained every practical concept in a very crisp and clear manner🤓🤓😄😄

[@vjrgv7462]

Whatevr u said is absolutely true.....my Clnt is the software employee in concentrix ...he did the same.....

[@badarikrishna3169]

Was it practically worth it in reality as explained in this video?

[@ayanshaikh9287]

Being a cs student sirf provision pada tha ye but a very a nice explanation & trick Aaj se apka fan ban gaya ❤❤❤

[@SathyendraPrabhu]

Yes. Idea is great. But the problem might come in 2 areas here. 1. When GST kind of taxation changes happen from Govt. This impacts these leasing scheme and makes calculations up n down. 2. When you leave the company or forced to leave.. you got to have complete amount in pocket to pay as net amount for remaining installments.

[@navbharatcycles2563]

POINT NO 3. All companies don't give fuel ,maintenance and driver perks but even then something is better than nothing . POINT NO 4. The residual value can be higher than 5% to 20% . plus during closing of the lease you may incur additional expenses . point 5. most of these charge high interest rates too. but overall something is better than nothing .

[@mandarrege4223]

Thanks for sharing detailed information . This is really helpful. But this calculation changes company wise. Few observation considering policy in our US based MNC, 1.Residual value after 3 year is 25% + GST 45% So benefit will reduce by 5 lakh straight. 2.Company policy for fuel/driver/insurance claim is less than 1 lakh. And that we can claim that without leasing . So we cannot show that profit. 3.Car is in company's name and we will be second owner after paying residual value. Not sure on RTO tax if any. In such cases,we hardly get any benefit. So employees need to caclculate the benefit case to case basis. (I know a friend who is getting fuel benefit as demonstrated by you but residual is 25% for them as well. So total benefit for him is 3-4 lakhs.)

[@akshayjain6665]

Though i understand this concept fully, but still watched every second. Totally admire the way you explain concepts.... Keep enlighting the young brigades.... Good wishes...

[@TaxationWithCASahilJain]

Thanks for all your valuable inputs in making this video ❤️

[@shailubisht6376]

120 rules of grammer ,rule no 43 when though is used in a sentence then only yet can be use as an optional and but will never be used with though and although

[@Arihant_Sethia]

Three cents from my side: 1. You have taken fuel cost, driver salary and maintenance cost to be very high. Usually companies have fixed amount for this which is maxed at 3-4 lakh. 2. Lease tenure end price is not 5%. It is around 30% at the end of 3 year lease and 20% at the end of 4 year lease. 3. RTO transfer cost is not accounted for. 4. Even after hypothecation removal while selling the car in market it is treated as second owner car as initially the car is registered on company name and transferred to your name at the end of lease tenure.

[@TaxationWithCASahilJain]

1 & 2) The figures that I’ve quoted in this video are straight out of the leasing policy of a big Indian MNC and not a figure I randomly made up. However, it of possible that your specific employer has a different policy structure which is why I’ve explained the process so that you can see for yourself whether leasing makes sense for you or not. 3) There is no RTO transfer in this case as the Employee remains owner of the car throughout and only hypothecation is removed upon payment of residual amount 4) Random assumptions on your part. I’m telling you practically that the RC remains in your name from Day 1. You are “first owner” in all the documents. No rhyme or reason why you would be treated as second owner in any market.

[@souvikroy9340]

I beg to differ @taxationwithcasahiljain sir, my company (IT MNC) has directly told me that for leasing car would be registered in company's name first and then transferred to my name at end of lease. For the employee the extra costs are interest cost which is extra paid on top of the car's value, 20L v/s 25.2 L plus payment for residual value of 1.02L as per your example. If you bring down the total income from 40L to 25L benefits would practically be minimal.

[@tarunpatel3741]

@@TaxationWithCASahilJain The vehicle will be registered on company name not on your name. So technically you will be the second owner of the car after lease tenure or you can sell the car book some profit.

[@railroadrao8466]

Still it's a great way to save money

[@akshatjain4375]

was just taking your lectures sir, break k baad seedha yha aagya 😋

[@TaxationWithCASahilJain]

Break me bhi padhayi kar rahey ho Akshat. Proud of you 🤗

[@dhruvjoshi1220]

Just blow my mind 😮. The power of Knowledge ❤

[@unknown-us5vs]

Please make a video of how actually a business owner can save tax by claiming depreciation and its steps etc in detail !!!!!!!

[@dhirajshetty2034]

Sahil sir brilliant video an absolute eye opener for someone from non financial background... Thanks Sahil sir once again👍

[@sandeepyadav1478]

Prodigal hero returns🙌, good to have u back

[@The_Vinitio]

Again a Bang on and insightful video Sahil Sir!!! I missed your videos since so long. Try posting on a regular basis.

[@amitkamra7822]

Also, fuel, driver and maintenance cost can be reimbursed even if the car is bought directly without company lease

[@intuitionist11]

If we a paying 70k per month * 3 years= 25.2 Lakhs + 1 Lakh (at last for owning at 5%) i.e: 26.2 lakh for a 20.4 Lakh car And saving 8 lakhs in taxes in 3 years Then at the end of 3 years net saving would be around 2 lakhs because we payed extra 5.8 lakhs for the leased car.

[@JoySahab]

lekin aapne 25 lakh pura ek sath thore diya 70k per month diya h to vo paisa aapke pass hi raha ab aap us pe return bhi kama sakte ho

[@shis10]

Amazing video. 💯🙌🏻 Best way to save taxes is to flee to Dubai and Singapore ♥️🔥😄

[@singleshotbysatyam1537]

If everyone will think as you, what will CAs do, non-sense!

[@shis10]

@@singleshotbysatyam1537 Tax like Switzerland ,Give Services like Uganda. ! Thats the problem.

[@sidpr007]

Sir apka jawab nahi. Big fan

[@sujithkumar1333]

In terms of government employees how will it work?

[@sahasarya4408]

Great in theory but probably better ways to save tax in the real world.

[@adityabhatia7861]

Bang on sahil sir video always full of knowledge and comprehensive in nature , your student aditya 🤗🤗

[@Learner945]

I took the car with this scheme. We have a different setup. Claim 24k for tax exemption of fuel plus driver per month and car price is based on cadre. In total im able to get the car at 5 lakhs less with 1% residual value at 4 years

[@CA_Hardev_Jadeja1]

Waah sir maja aa gaya ye tax planning dekh ke ❤😊

[@princekumarsingh4057]

Sir ab na wait nahi ho raha hai...ca final tax ke liye ..super excited hai...pls share related details and .... kuch daliye sir utube pr...jisse ap famous ho ..apke bathces famous ho😅

[@ourworld86]

Beautifully explained

[@sachjain2]

There is a gap in this analysis. Usually employers want to get the cars registration in company name for the lease period and get it transferred at the end of lease period. Now when the employee pays residual value of Rs. 1.02 lacs for a car valued at Rs. 15 lacs, they are required to pay fringe benefit tax on Rs. 13.98 lacs.

[@AmitGupta-tm2fx]

Sir, keep uploading such type of content.

[@sagarrelan3049]

Thanks for the explanation, but I doubt the last part where you mentioned the car cost in case of Lease is 12.4 lakhs (20.4 - 8), after tax savings. I think as we are paying 70k per month and rupees 1 lakh residual value, that amounts to 26.2 lakhs (25.2+1), so as you had earlier mentioned that in case of Lease the actual car cost would be more, as per the calculations, the actual car cost to customer should be around 18.8 lakhs (26.2 - 8), definitely one saves on the taxes. But I doubt there might be any gains on reselling the car.

[@meditation.365days]

You Missed that 4.5 Lacs p.a and for 3 years it equals to 13.4 lacs after deduction of 5 lakhs it comes to save an amount of 8 lakhs and some thousands.

[@sagarrelan3049]

@@meditation.365days No I didn't missed the Tax saving part as i mentioned in my comment that "definitely one saves on the taxes", I was questioning the gain on selling the car, we cannot count it as extra gain, as the cost in case of leasing is more compared to buying it

[@ABHISHEK98927]

Guru Brahma Guru Vishnu, Guru Devo Maheshwara Guru Sakshat Parabrahma, Tasmai Shri Guruve Namah, happy Guru Purnima from ur chintu sir love u

[@sumitdwalunje]

That HAANJI, GOOD EVENING missed very much sir. Please bring this kind of info. videos once a week😍😊Loves ur knowledge and explanation skills

[@pushkarmehta1]

On point sir, however, the on road price for vehicles under leasing is higher due to significantly high road tax on corporate lease. The savings in this case would probably come down by a lakh or two.

[@TaxationWithCASahilJain]

Lease of course has to be higher as the Leasing company will have to earn Interest to make this entire proposal financially viable for them as well. However, as you might be able to observe in this video, in each of the years, you saved tax of close to 4.5 lacs making total savings go upto close to 13 lacs. However, since leasing premium is higher than general car cost, net savings are of 8 lacs which is again a good deal..

[@vardanrathi7777]

No. High Road Tax is only applicable when the car is registered in a company's name. In this case, car is registered in the employee's name only.

[@princeofheaven19]

@@vardanrathi7777in a car lease the car is in the name of the leasing company usually orix

[@vardanrathi7777]

@@princeofheaven19 Nope. He clarified it very clearly in the video that the ownership is in the name of the employee and the leasing company does the hypothecation. Even if you see Maruti's leasing plans, they lease the car to the person and Orix or others become the hypothecation party.

[@AdityaRangarajan-f4v]

There is one mis guide in this video , you wont save 8 lakhs , you can only save approximately 2-2.5 lakhs by leasing.Let me explain For example you dont buy car on lease and you bought at cash price after that you can still take chauffeur and petrol reimbursement which will reduce 6.5 lakhs of your annual salary and you can save 2 lakhs annually approximately on taxes. So basically I mean to say by car leasing you are only saving 2-2.5 lakhs , rest you are saving via reimbursement of Petrol and chauffeur expenses.

[@TaxationWithCASahilJain]

Not really. If the employee buys car on cash and just gets petrol and driver reimbursement, then, taxation is completely different. In that case, the actual expense reimbursed gets added to income with a nominal subtraction of 1,800/2,400 per month which will barely save you any tax. I'll try and record a video to explain this in detail.

[@dipanbanerjee5517]

Fantastic discourse Sir!!!

[@newsvuse8489]

Very nice voice and style of explanation

[@dhiraj5951]

Sirji u are grate❤

[@prasadgadekar7206]

in leasing there is always a interest component while buying car in personal capacity most of the people will buy on emi so first option should show cost after interest current comparison is not like to like

[@sauravbisht7498]

Greatful sir❤

[@7srider]

How about for self employed people like Doctors? How can they avail this

[@rishabhjainrashh]

You always bring something new to the table. Proud to be a subscriber of your channel.

[@HimalayaGarg]

What if no driver salary, and fuel expense per year is only 1L. We will not get basic salary reduced, and will end up paying higher tax?

[@RajatJain-ov3vh]

Always the most comprehensive videos. 👌

[@ankitpal_in]

My manager explained to me this long back. Aaj revision ho gay.

[@3raghuveer]

There is a drawback for this car leasing. In case if you are planning for a home loan. You will be get lesser amount since your salary is less due to car lease emi.

[@singleshotbysatyam1537]

Ghar car sab ek hi time krega ky bhai!! Common sense toh lease pai nhi dedina kahin!!

[@3raghuveer]

@@singleshotbysatyam1537 bhai car lease ka time frame 5 years bhi hota hai. All I am saying is agar agle 4-5 saal me Ghar lene k plan nai ho toh car lease best option hai.

[@TaxationWithCASahilJain]

Your CTC still remains 40 Lacs even if you go for leasing option. CTC includes Basic Pay, Perqs, Allowances etc.

[@vijaykumarmamidi]

Very informative video. I was always confused if one should go with company car lease policy. Thanks for clarifying all doubts in my mind. I just need to work and see how much it is beneficial if I don't opt for driver and my fuel bill is 10K per month

[@TaxationWithCASahilJain]

Yes. Financial viability increases or decreases depending on income of employee, how expensive the car is, what the lease premiums are, what reimbursements are etc. Hence, I’ve tried to explain the entire process in detail so that you can put in your actual numbers and see for yourself what suits you better.

[@amitkamra7822]

There is a limit to Leasing amount based on components of salary (both car Leasing amount + fuel, maintenance etc). IT do not allow you to save this much

[@arpitnahata947]

Can you provide examples of leasing companies which offer such schemes? I need to connect with them to provide this for my company. Also, who determines the residual value? Leasing company I believe.

[@Rohit_Gupta1629]

Is it applicable on 2 wheeler as well sir??

[@CASTUDENT-tc5gd]

Nope

[@pankajjaiswal5806]

​@@CASTUDENT-tc5gd yes

[@CASTUDENT-tc5gd]

@@pankajjaiswal5806 what yes?? Nahi milega two wheeler pe na

[@greylife1988]

Finally KZbin account ka password mil hi gyaa 😂

[@Harryprasad930]

How government employees can do leasing??

[@mrevilove666]

Wohi soch ra tha… humare HR ko to samjh hi ni aayega…bolenge humare Deptt ka kaam ni h. 😂

[@dharmikzinzuvadiya2035]

Govt employees ko zaroorat hi nahi hai. Table ke niche se bahut cash aata hai govt employees ko 😅

[@ssd-zj6vx]

Psb mein toh yhi chal rha hain

[@nishanttyagi6771]

Amazing 🎉🎉

[@souravmukherjee5567]

My company provide lease car can I get tax benefit if I am on the new tax regime

[@balvindersingh339]

Is this possible for government employee?

[@swastikmishra372]

and what if employee leaves the organisation or the organisation removes the employee before end of hypothecation ?

[@sairamgunda3590]

Since we are paying 70k per month i.e 25 L for 3 years. And we are saving 8 L. But, at the end we are saving 3 L only effectively (20+8-25) as car cost is 20 L ( But we are paying 25L instead). Is it correct?

[@shredder3055]

You should consider the down-payment as well, as there is no down-payment on lease scheme you can invest and consider some interest on it.

[@adityamundra3699]

Is this beneficial for a business owner too, rather than using depreciation, which is too small.

[@adityanishant8708]

Sir my father is a coal transporter then can I claim gst credit on it

[@pavanhegde8404]

Great prints, however if you self drive the vehicle, equation will be completely different...

[@Rohit615Kumar]

Can we get car priced higher than what company is providing the limit

[@sanketgupta1879]

How is lease rental exempt as car perq?

[@rrkatheer]

Can we still claim fuel, insurance and gst etc while filing income tax in case these are not provided by company not part of CTC ? Please clarify

[@keshavgarg2972]

Shubh Guru Poornima Sir. Thank you for guiding us all ☺️ Your insights are always 💯💯

[@The_Time_Traveller]

The 70k/month you are paying for leasing program in 3 years accumulate to =70,000 x 3 x 12 = 25,20,000 Which is more than the value of the car from the first year it self!!!

[@yellowbird-iv6dz]

Mai proprietor firm bnaker Usme se car khreed leta hu to mujko deprissasion claim milega sir plz reply

[@faiz697]

Rhe biggest peoblem for this to work is being in a company that has lease pepgram

[@AVINANCE]

Thank you sir for the amazing knowledge. Is there any changes in this with respect to electric cars and are there any depreciation benefits for the employer?

[@codecorn8030]

say i want to buy a 30L car with 20LPA salary can company allow it ? Or there is a limit of ...this much price car only i shd buy ? Plsssss. reply !

[@nayeemuddin3096]

Sir Third year me 40L minus deprecation deduct karke remaining employee ke hands me taxable hoga ya nahi

[@TaxationWithCASahilJain]

Not taxable. This car is never owned by the employer and thus, this is not a case of employer transferring an asset owned by him to the employee.

[@saikiran9996]

​@@TaxationWithCASahilJain Sir, if employer is never owner of car, how come perquisite rule be applied for computing salary income either car has to be owned by employer or provided to employee by hiring. If it is case of hiring, from whom it is. Please clarify❤.

[@anuragtaneja]

If the organisation is looking for a residual value of 10 percent in advance, is it still a good option to go with?

[@ABHISHEK98927]

Everything is temporary 😅 but chiku and chintu are permanent

[@kunjnaik6035]

Can we buy bike using similar way?

[@jain24harshit]

Sir what if I have to switch jobs in this leasing period? Is the car lease transferable to another corporate?

[@tapishpositive]

Informative video. One ques., you have increased 20.4 L to 25.2 becuase of GST on the rental by company or a notional interest?

[@TaxationWithCASahilJain]

20.4 lacs is GST inclusive on road price to buy car 25.2 Lacs is GST inclusive lease rental to get the car on lease.

[@rajatmehta4597]

Isn’t the employee then restricted/ forced to not leave the company for atleast 3 years? What if one decides to quit the company- pls help with this question?

[@Arihant_Sethia]

Final residual amount is 20% at the end of 4 year lease and around 30% after three year which is not small amount as you have shown in your video as 5%

[@TaxationWithCASahilJain]

The figures that I’ve quoted in this video are straight out of the leasing policy of a big Indian MNC and not a figure I randomly made up. However, it of possible that your specific employer has a different policy structure which is why I’ve explained the process so that you can see for yourself whether leasing makes sense for you or not.

[@strangebaby]

any way for an employee to save tax without any lease?

[@guru3563]

Make nxt video on how option trader can save taxes ... Include brokerage , stt etc

[@arenve]

Great point! I am a consultant getting a fixed retainer fee every month from my company What's my way out?

[@vignesh.v7298]

Do i have to submit fuel and maintenance bills for tax saving or without bills can i detect tax for maintenance

[@vjrgv7462]

If u submit to the company then they vk reimburse ....thereby it includes in ur payslip

[@WalterWhite-og6wj]

In reality, very few companies have leasing programs in India. Even if a company has, they have lot of conditions.

[@gangeshshaw172]

What would happen if the employee leave the current organization and joins other organization?

[@Aman-vw4zu]

Sir one doubt, jab employer employee ko car sale krega after few years toh kuch amount taxable hoga kya employee ke hand mei?

[@harshart8339]

Sir increment is always happens on base pay so if we change salary structure that means we are compromised increments is it?

[@abhijeetkaushal1343]

My salary is 33.5LPA yet all this goes above my head.. I'm only good in tech not commerce, seems like this is good to give me questions for my CA

[@GratefulAlia]

which lease company offers a 5% residual value after 3 years?

[@036heart]

I don't have company leasing policy, still can we save?

[@bhishanwadhai6670]

Hello sir, Kindly make videos related to the NPS and UPS pension scheme of Government of India as well as Maharashtra..

[@erryogeshmoscowarium1032]

Sir is there any way to save tax money for govt employees if they want to buy car??

[@itsbhooms]

Wo jo 6L hai jo driver and maintenance ki payment hogi. Wo bhi to income me se hi jayegi. Usko subtract nahi kiya final amount se

[@saugaatgupta6377]

For this scenario is it necessary that car should have yellow number plate?

[@TaxationWithCASahilJain]

Of course not. It’s a private car, not a taxi. It’ll have the normal white plate with black text.

[@saugaatgupta6377]

@@TaxationWithCASahilJain thanks

[@saugaatgupta6377]

@@TaxationWithCASahilJain Is this scheme eligible for engineer in Indian Railways?

[@eren-qu9uu]

this things make sense for rich people

[@vimalsidhartha7625]

Business person buy a car or lease which is best

[@akhileshkursija]

can you explain what is the benefit of the leasing company?

[@TaxationWithCASahilJain]

They spent around 20 Lacs and recovered around 25. The difference is the Interest that they earn from this arrangement.

[@PuranjayJain]

Can government employees also do it?

[@kumarsaurabh6256]

Residual value is usually in the range of 20 to 25% is what I have seen, not 5%.

[@SuperF1ferrari]

Yes, that's correct. It's usually between 20-25% . I have not seen a residual value of 5% for even 4 years leasing

[@sauravbhatt9351]

Sir can you make a video on cfa and it's scope , earning , growth etc pls

[@neeraj3885]

Sir can u please make a video on what questions and documents to ask from client while filing their ITR return for their business

[@shrawan.1]

Great ❤❤

[@akayesth]

Is there a provision to do the same thing with bikes as well?

[@karanjoshi2126]

No, it is only applicable for Cars

[@himalayahinduja1010]

A more efficient way would be government decreasing taxes.

[@harshrajjadhav940]

That's not going to happen.

[@Anand25692]

Can we pay driver salary to family member who doesn't have tax liability?