REVISED CAR SCHEME

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REVISED CAR SCHEME (M1-B - M3-C)

Check your Eligibility

(wef 01/04/2010)

Management has revised the Car Scheme for Covenanted M1-B to M3-C, as under
1

It has been decided by the Management to revise the Car Scheme for Eligible employees in Tier-1, Tier 2 and Tier-3 with immediate effect. The
car will henceforth be purchased directly by the Company and not leased through any Finance Company. The Scheme will be known as the
Company Owned Car Scheme (COCS). Consequently, Company Leased Car Scheme (CLCS) stands withdrawn except for those who are already
in CLCS.
As per the recent circular issued by the Management on Dec 01st, 2009 on usage of diesel car under company car scheme. It has been decided
by the Management to permit purchase/usage of Diesel cars, Sports Utility Vehicles (SUVs) and Multi-utility Vehicles (MUVs) under the Company
Car Scheme with effect from January 1, 2010.
Since the price of diesel in India is lower than the price of petrol, employees who opt for a diesel car will receive a lower amount. Hence, we
should encourage employees not to choose a diesel car and permit it only after they are made aware of the repercussions.
In case the staff has purchased/using a diesel car he will eligible for reimbursement of diesel amount only.
The Finance Act, 2009 has reintroduced perquisite valuation on certain benefits to employees including reimbursement of car expenses. The
effect of this is that employees who are provided a car by the company pay some tax (Rs.300 to Rs.550 p.m.) depending on tax slab, while
employees who own a car but are paid car running expenses by the company pay a much higher tax. While the company cannot take over this
burden, it has been decided to help employees partially to mitigate its effect.

COMPANY OWNED CAR SCHEME (COCS)

2.1

Base & Maximum Limit

The car under COCS will be purchased by and registered in the name of the Company. Following will be the Base limits and Maximum
limits for cars under this Scheme (inclusive of registration charges) :

2.2

Grade

Base Limit (BL)

M1-B

2.85

Maximum Limit
(ML)
5.50

Extendable Limit (EL)

6.50

Cost of
Accessories*
0.10

Refundable Deposit

Company Finance Amount (CFA) = (Base Price + Registration Charges/One Time Tax / Road Tax + VAT + Octroi Charges +One-time Service
Charges +Accessories) - (Corporate Discount)
BL = Base Limit

Grade

M1-B-M2-C

Refundable Deposit
CFA <=
BL

CFA > BL and

CFA <= ML

15% of
CFA

15%of BL + 100%
(CFA-BL)

Refundable Deposit + Adjustable Deposit

CFA > ML and CFA <= EL

Refundable Deposit: 15% of BL + 100%

(ML - BL)
+ Adjustable Deposit: 100% (CFA - ML)

2.3

CFA >
EL

Not
Allowed

COCS Period
The normal COCS period is for 5 years. In order to mitigate the tax burden as per the the Finance Act 2009, the staff can continue in
COCS till he/she becomes eligible for Re-entry. If the employee opts for EOCS, he would bear higher tax.

2.4

Eligibility
Eligibility for First Entry / Re-entry to the Scheme is not automatic. Entry / Re-Entry would be considered by the Management / Car
Committee based on
z
z
z

Performance and potential of the applicant

Availability of Budget
Eligibility as per Rules

Eligibility for Entry into COCS

Staff members who are meeting the following criteria would be eligible for entry into COCS, subject to the recommendation by Car
Committee
Cadre
M1-B & M1-C

MLPs with average FAIR rating not less

than

Others with average fair rating not less

than

Re-entry will be permitted subject to the above after the completion of number of years in the scheme as given below:
However, in exceptional cases the re-entry period indicated above will be reduced or increased based on the FAIR average rating. To
know the re-entry applicable for you, Kindly contact HQ-OC HR

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REVISED CAR SCHEME

2.5

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Insurance & Service Charges

Company will pay one-time service charges at actuals subject to a maximum of Rs.2500/- and Annual Insurance charges till the expiry of
the COCS period.

2.6

Guidelines for entry into COCS

2.7

Settlement of dues and closure of the scheme

(refer Annexure -A) (go to Annexures given in the bottom)

Guideline on closure of COCS are given in Annexure - B (go to Annexures given in the bottom)

2.8

Reimbursement of Fixed and Variable Maintenance Expenses

Employees covered in the Company Leased Car Scheme shall be reimbursed maintenance expenses and petrol expenses as per para
4 below.

EMPLOYEE OWNED CAR SCHEME (EOCS)

3.1

Eligibility
Staff members In Covenanted M1-B to M3-B, are eligible, subject to recommendation by Car Committee.

3.2

Car Lease Rental Allowance

Car Lease Rental Allowance (CLRA) for eligible employees in Covenanted Grades M1-B to M3-B, as under:
3.2.1 Eligibility
z

z
z

Employees in Covenanted M1-B to M3-B who are eligible for entry into COCS but opt not to take a car under the COCS and
use their own car on Company's business.
Employees in Covenanted M2-A to M3-B who are eligible for re-entry into COCS and prefer not to re-enter the same.
In order to mitigate the tax burden the following changes have been done w.e.f 01/04/2010
z
z

CLRA currently being paid will continue to be paid without change, but will be renamed as "Additional CLRA"
A Fixed amount, under the head "CLRA", will be paid to all employees under EOCS. Payment of the this CLRA will be
automatically processed by SSC based on the employee being in EOCS

3.2.2 Limits

3.3

Grade

CLRA
(Rs.P.M.)

Additional CLRA
(Rs.P.M.)

Cov M1-B

950

5000

These changes will be effective 1st April 2010 and will be reflected in the salary slip / reimbursement claim for April 2010
onwards

In respect of employees who continue to be on the rolls of the company as on 15th April 2010 and have not submitted their
resignation as on that date, the company will also additionally pay the amounts as applicable for the period April 2009 to
March 2010, along with the payment for April 2010.

The Tax Liability on this payment will be on the employee concerned

Reimbursement of Fixed and Variable Maintenance Expenses

Employees covered in the Employee Owned Car Scheme shall be reimbursed maintenance expenses and petrol expenses as per para 4
below.

Reimbursement of Fixed and Variable Maintenance Expenses

4.1

Fixed Maintenance Expenses

The Fixed Maintenance Expenses payable under both COCS and EOCS for a given grade have been equalized and hence forth it will be
based on the location as follows:

Fixed Maintenance Expenses (Rs.p.m.)

Grade

(for COCS/EOCS)

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REVISED CAR SCHEME

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MUMBAI/DELHI

Cov M1-B

4.2

KOLKATA /CHENNAI /
BANGALORE

4400

4350

OTHER
LOCATIONS

4300

These changes will be effective 1st April 2010 and will be reflected in the salary slip / reimbursement claim for April 2010 onwards

In respect of employees who continue to be on the rolls of the company as on 15th April 2010 and have not submitted their
resignation as on that date, the company will also additionally pay the amounts as applicable for the period April 2009 to March
2010, along with the payment for April 2010.

Variable Maintenance Expenses

The Reimbursement of Petrol/Diesel Expenses shall be Litres of petrol/diesel per month, fixed gradewise. This will replace the concepts of
Kilometer Limit and Efficiency Limit. The P&OD (HQ) shall fix the Litres of petrol applicable for each employee.
The Limit range of Reimbursement of Petrol Expenses shall as follows:
Grade
Cov M1-B

Petrol/Diesel
Litres p.m.
50

The formula that shall be used to calculate Reimbursement of Petrol/Diesel Expenses:

Litres of Petrol (for each grade) X Prevailing petrol/diesel price
In case the staff has purchased/using a diesel car he will eligible for reimbursement of diesel amount only.

Reduction when employees is on leave ( for COCS & EOCS)

Out of the total litres of petrol sanctioned, not less than 10% will be deemed to be litres for personal use. If the employee is on leave and when
the Car is not in use on Company's business, the litres of petrol will be reduced proportionately for the period. This deduction will be restricted to
absence in excess of seven days only. However, the fixed expenses will be reimbursed in full, without deduction. Formula for calculating the
reduction is:
(No of Days leave 7)*(Total Litres of petrol/diesel sanctioned / No of days in the month)

Expenses for using car to cover upcountry distance (for COCS & EOCS)
If the employee covers upcountry distance (outside city limits) on car on Companys business, he/she may submit a separate claim in the
prescribed form to the respective P&OD Department (Annexure I). The rate of reimbursement shall be as following.
For every 100 KMs Covered:
Grade
Cov M1-B

Litres of Petrol/Diesel
Reimbursed
8

Transfer of Car to Employee (under CLCS):

The current practice of taking the car under EOCS on expiry of the primary lease period stands withdrawn.
Employee under CLCS will continue in the scheme till the expiry of primary lease period. At the end of the lease period, the car will be taken on
a secondary lease for 3 years. If the employee is eligible for and opts for re-entry into COCS, the secondary lease will be foreclosed.
Transfer of the car to the employee will be done @ 7.5 of the original value of the car at the end of the eight years. If it is to be done before the
expiry of eight years. The terms and conditions as agreed with the leasing company will be followed.

Transfer of Car to Employee (under COCS):

In
At
At
At
At

view of the changes

the end of 5 years :
the end of 6 years :
the end of 7 years :
the end of 8 years :

being introduced to mitigate the tax effect, transfer will now be done at the following rates :
15%
12.5%
10%
7.5%

Annexures
Click here to print the Application Form

Annexure I

CAR EXPENSE APPLICATION FORM

For using car in companys business to cover upcountry distance

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REVISED CAR SCHEME

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To be submitted to respective P&OD Department

Date

Name ______________________ P.S.No. ___________ Grade : __________

Journey

From

____________________

Distance covered ____________

(Total Distance in KMs)

To

________________

Date of Journey ______________

__________________
Employees Signature

Addl Litres of Petrol

Santioned _____ Litres

Rate of Petrol Rs.________

Amount Rs.________

_________________
Authorized Signatory

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