Car Perquisite Calculator 2026-27 (Rule 15)

How the car perquisite is valued in tax year 2026-27

When your employer lets you use a car, the benefit is a perquisite and is taxed as part of your salary. For tax year 2026-27 (1 April 2026 to 31 March 2027) the values come from Table II under sub-rule (3) of Rule 15 of the Income-tax Rules, 2026, which replaced Rule 3 of the 1962 Rules. Most cases use a fixed monthly amount rather than the real cost of the car.

Employer owns or hires the car

Work and personal use, employer pays running costs: ₹5,000 a month (engine up to 1.6 litres or electric) or ₹7,000 a month (above 1.6 litres).
Work and personal use, you pay personal running costs: ₹2,000 or ₹3,000 a month.
Chauffeur: add ₹3,000 a month in either case.
Only personal use: the employer's actual running and maintenance spend, plus the driver's pay, plus wear and tear at 10% a year of the car's cost, minus anything you pay back.
Only official use: nil, if the journey records and certificate described below are kept.

You own the vehicle, employer pays costs

Car, work and personal use: the actual amount the employer pays or reimburses, minus ₹5,000 a month (up to 1.6 litres or electric) or ₹7,000 a month (above 1.6 litres), minus a further ₹3,000 if a driver is paid for.
Two-wheeler or other conveyance: actual amount minus ₹3,000 a month.
Only official use: nil, with the same records.
Only personal use: this calculator treats the full reimbursement as taxable, because the employer is paying a personal cost of yours.

Old values versus new values (per month)

Case	Rule 3, 1962 Rules to Rule 15, 2026 Rules
Employer pays costs, up to 1.6 litres or EV	₹1,800 to ₹5,000
Employer pays costs, above 1.6 litres	₹2,400 to ₹7,000
You pay personal costs, up to 1.6 litres or EV	₹600 to ₹2,000
You pay personal costs, above 1.6 litres	₹900 to ₹3,000
Chauffeur	₹900 to ₹3,000
Own two-wheeler, costs reimbursed (deduction)	₹900 to ₹3,000

Old and new values as compared in Nexdigm and the KPMG flash alert 2026-081.

Worked example

Your employer gives you a 1.5 litre sedan with a driver. You use it for office and personal trips, and the employer pays fuel and servicing. Your slab rate is 30%.

Car value, up to 1.6 litres, employer pays costs	₹5,000 a month
Chauffeur	₹3,000 a month
Monthly perquisite	₹8,000
Added to taxable salary for 12 months	₹96,000
Extra tax at 30% plus 4% cess	₹29,952

Under the old Rule 3 the same car was ₹2,700 a month, or ₹32,400 a year. The taxable value rises by ₹63,600 a year, which at 30% plus cess is about ₹19,843 more tax.

When the car is used only for work

Sub-rule (3)(c) of Rule 15 lets the employer or employee claim that the car is used wholly for official duties, or that official running costs are higher than the fixed amounts. The claim holds only if both conditions are met:

The employer keeps complete details of each official journey: date, destination, mileage and the amount spent.
The employer gives a certificate that the expense was incurred wholly and exclusively for official duties.

Without these, the fixed monthly values for mixed use apply. If your employer reimburses fuel for your own car and you drive it only for work, ask payroll whether they keep a logbook and issue this certificate, since it decides whether the full reimbursement is tax-free.

Points to check before you rely on the figure

Both tax regimes: the perquisite is taxed under the new regime as well as the old one. Your employer adds it to salary for TDS and shows it in Form 130 (earlier Form 16) and the perquisite statement that replaces Form 12BA.
Specified employees: some benefits are taxed only for a "specified employee", meaning a director, a person with a substantial interest, or someone whose monetary salary is above the limit in the Rules. That limit rises from ₹50,000 to ₹4,00,000 from tax year 2026-27, according to Nexdigm and myITreturn. If you are a non-director earning ₹4,00,000 or less in cash salary, confirm with a tax adviser whether your car benefit is taxable at all. This calculator assumes it is.
Hired cars and leases: Table II covers cars the employer owns or hires in the same row. For only-personal use of a hired car, payroll teams often use the hire or lease charge in place of 10% wear and tear. That is a common practice, not a figure stated in the Rule, so check it with your adviser.
More than one car: if you have several employer cars for personal use, one is valued at the fixed mixed-use amount and the others at the only-personal-use cost, under sub-rule (3)(b).
Tax estimate: the extra tax shown is the perquisite times your slab rate plus 4% health and education cess. It ignores surcharge and the effect of crossing a slab or the rebate limit, so run your full salary through the income tax calculator for a final number.

How is the perquisite value of a company car calculated for 2026-27?

Table II under Rule 15 of the Income-tax Rules, 2026 sets fixed monthly values. For a car the employer owns or hires that you use for both work and personal trips, with the employer paying running costs, the value is ₹5,000 a month if the engine is up to 1.6 litres or the car is electric, and ₹7,000 a month above 1.6 litres. If you pay the running costs of personal use yourself, the values are ₹2,000 and ₹3,000. A chauffeur adds ₹3,000 a month in either case.

How much have car perquisite values gone up from 1 April 2026?

Under Rule 3 of the old Income-tax Rules, 1962 the values were ₹1,800 and ₹2,400 a month, ₹600 and ₹900 when the employee paid personal running costs, and ₹900 for a chauffeur. From tax year 2026-27 they are ₹5,000, ₹7,000, ₹2,000, ₹3,000 and ₹3,000. A small car with a chauffeur goes from ₹2,700 to ₹8,000 a month, or from ₹32,400 to ₹96,000 a year.

Is a company car taxed under the new tax regime?

Yes. A perquisite is part of salary under both the old and the new regime. The new regime removes many exemptions and deductions, but it does not remove the taxable value of a car the employer gives you. The value is added to your salary, your employer deducts TDS on it, and it appears in your Form 130 (earlier Form 16).

Is a car used only for official work taxable?

No, if the paperwork is in place. Rule 15(3)(c) says no value is taxed when the employer keeps complete details of each official journey (date, destination, mileage and the amount spent) and gives a certificate that the expense was incurred wholly and exclusively for official duties. Without those records the fixed monthly values for mixed use apply.

I own the car and my employer reimburses fuel and maintenance. What is taxable?

For mixed use, the taxable value is the actual amount reimbursed minus ₹5,000 a month for a car up to 1.6 litres or electric, or minus ₹7,000 a month above 1.6 litres, plus a further ₹3,000 off if the employer also pays for a driver. For a two-wheeler or other conveyance the deduction is ₹3,000 a month. If the reimbursement is below these amounts, nothing is taxable.

Does an electric car count as a small car?

Yes. Table II under Rule 15 puts an electric vehicle in the same column as a car with an engine of up to 1.6 litres, so the ₹5,000 and ₹2,000 monthly values apply to an EV whatever its size or price.

Related tools

TDS on salary calculator to see how the car perquisite changes your monthly TDS.
Income tax calculator to compare the old and new regimes with the perquisite included.
LTA exemption calculator for another salary benefit with its own tax rules.
CTC breakup calculator to plan where a car lease sits in a salary structure.

Building offers with a car or car lease in the package? GetHirePlus handles the steps before the offer letter: AI screening and interviews for your open roles.

Sources

Official sources first, then the secondary sources used to cross-check the values on this page:

Hiring or job-hunting? GetHirePlus makes it faster.

AI-powered screening, assessments, and interviews, for employers and candidates alike.

Get started free

Spotted a value that looks off? We'd really like to know. Please share it with us at [email protected].

Disclaimer: This calculator gives an estimate for general guidance under the Income-tax Rules, 2026 for tax year 2026-27. It is not tax advice. Your employer's payroll treatment and records decide the final value.