India
Reimbursement for using a private vehicle for official purposes
In India, reimbursement for using your own car or two-wheeler for work depends on your employer's policy. There is no universal tax-free rate per kilometre in the income-tax rules. For tax year 2026–27, check both your company's approved rate or expense policy and the tax conditions that apply to the payment.
Vehicle and fuel reimbursement methods
Before a work trip, confirm which method your employer accepts and whether fuel, tolls and parking are included or claimed separately.
| Method | How to prepare the claim |
|---|---|
| Rate per kilometre | Multiply approved business kilometres by the company rate for your vehicle. |
| Actual fuel and running costs | Submit the eligible expenses with receipts and records showing their official use. |
| Monthly allowance | Check the allowance conditions with payroll; a fixed payment is not automatically tax-free. |
Central and state government travel entitlements have their own rules. A government department's mileage allowance is not a mandatory rate for every private employer.
Tax treatment from 1 April 2026
The Income-tax Act, 2025 and Income-tax Rules, 2026 apply from 1 April 2026. Earlier financial years remain under the previous legislation, even if the return is filed later.
For an employee-owned car, Rule 15 provides a nil taxable perquisite value when reimbursement of actual running and maintenance costs is wholly for official use and the required employer records and certification are maintained. Mixed official and personal use has a separate valuation method. A company-approved kilometre rate alone does not establish the tax treatment.
Keep home-to-office travel separate from client visits and other official journeys so payroll can apply the appropriate rules. A salary allowance, reimbursement of expenses and a self-employed person's business deduction are different arrangements.
Calculate your company mileage claim
For example, if your company agrees ₹10 per km, a 120 km official journey gives a claim of 120 × ₹10 = ₹1,200. This is an illustration of a company policy, not an official or recommended Indian rate. Do not add fuel again if the agreed kilometre rate already covers it.
Keep a vehicle logbook for official trips
Record the journey date, start and destination, purpose, kilometres and relevant expenditure. Retain fuel bills and other supporting receipts. The employer's certification of official expenditure is also part of the documentation required under the vehicle perquisite rules; a mileage log does not replace it.
Motolog helps you track business mileage automatically and organise your trips for a reimbursement claim. Set a custom rate to match your employer's policy and review the trip details before submitting them. Your employer remains responsible for approving the claim and applying payroll rules.