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Auto Calculators

Car benefits, lease vs buy, perquisite tax

If you have a car benefit in your CTC — lease, car allowance, fuel reimbursement, or a company-provided car — these calculators show you the exact tax impact and which option puts the most money in your pocket.

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CTC Car Benefit

Cash vs lease vs company car

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Lease vs Buy

Total cost comparison

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Perquisite Tax

Rule 3 taxable value

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Fuel Reimbursement

Taxable or exempt?

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CTC Car Benefit Calculator

Cash allowance vs car lease vs company car — which puts more money in your pocket?

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Car Lease vs Buy Calculator

Compare total cost of company car lease vs taking a loan and buying outright.

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Car Perquisite Tax Calculator

How much extra tax do you pay on a company-provided car? Rule 3 perquisite values.

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Fuel Reimbursement Tax

Is your fuel reimbursement taxable? New vs old regime impact on take-home.

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💡 Key rule: Car lease is pre-tax

When your employer structures a car lease in your CTC, the lease amount is deducted from your gross salary BEFORE TDS is calculated. At a 30% tax bracket, a ₹15,000/month lease saves you approximately ₹5,600/month in tax — making it significantly better than taking the same amount as cash.

How Car Benefits Work in Indian CTC Structures

Many Indian companies, especially in tech and consulting, let employees structure a car — either leased by the company or bought personally with a reimbursed EMI — as part of their CTC. This is attractive because the lease or EMI amount is deducted from gross salary before tax is computed, unlike a cash allowance which is taxed just like regular salary. The trade-off is a fixed monthly perquisite tax under Rule 3, which is usually far smaller than the tax saved.

At the end of the lease period (typically 3-4 years), most companies let you buy the car at its depreciated book value, which is often well below market price. Whether this beats simply taking a car loan and buying outright depends on your tax bracket, the lease markup your employer charges, and how long you plan to keep the car — exactly what the Car Lease vs Buy Calculator compares.

Frequently Asked Questions

Is a company car lease better than a cash allowance?

Usually yes, if you were going to buy or lease a car anyway. A car lease structured into your CTC is deducted from gross salary before tax, effectively giving you the car at a discount equal to your tax rate. A cash car allowance, by contrast, is fully taxable like regular salary. The CTC Car Benefit Calculator compares both against buying with a personal loan.

How is car perquisite tax calculated?

Under Income Tax Rule 3, if the company car is used for both official and personal purposes, a fixed perquisite value is added to your taxable income — typically ₹1,800/month for cars up to 1.6L engine capacity, or ₹2,400/month for larger engines (plus ₹900/month if a driver is provided). This flat amount is taxed at your slab rate, regardless of the car's actual value.

Is fuel reimbursement taxable?

If fuel is reimbursed against actual bills for official use of a company-owned car, it's generally exempt up to the documented business use, with only the personal-use portion (via the perquisite value) being taxable. Under the new tax regime, some of these exemptions may not apply the same way, so it's worth checking both regimes.

Does a car lease affect my take-home salary?

Yes — since the lease amount is deducted from gross salary before computing tax, your in-hand salary reduces by the lease EMI amount, but your tax outgo also drops. Net-net, most people in the 20-30% tax bracket come out ahead compared to paying the same EMI from post-tax cash.