Reimbursement for using a private vehicle for official purposes
In India, there is no standard government-defined rate per kilometre for reimbursing employees who use their private vehicles for official work.
Employers may define their own reimbursement policy, based on vehicle type, fuel price, and business travel requirements.
Reimbursements that are properly documented and reasonable are tax-exempt under Section 10(14) of the Income Tax Act, 1961.
Common reimbursement methods
| Type of reimbursement | Description |
|---|---|
| Fixed rate per kilometre | Determined by the employer (e.g. ₹8–₹12 per km for cars, ₹4–₹6 for two-wheelers) |
| Actual fuel reimbursement | Based on receipts or fuel card statements |
| Monthly travel allowance | Fixed amount for employees who travel regularly |
To qualify as a tax-free expense, the employee must maintain a logbook recording the date, route, purpose, and distance travelled.
Reimbursements must relate strictly to business use; personal travel is not deductible.
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