IIFL Car Lease Policy

1. Objective of the Policy

IIFL Car leasing policy aims at:

 Providing flexibility to the eligible employees, in choosing car models through an operating leasing
plan within the choices available in the Indian market.
 Provides a non-taxable reimbursement basket as per Income tax laws to enjoy a higher tax benefit.

2. Scope:

The scope of the policy is to provide eligible employees with a vehicle from a pre-determined Monthly Rental
Allowance. Employees eligible to participate in the Company provided Car Scheme will be determined based
on their CTC.

3. Effective date: This policy comes into effect from 1st January 2017.

4. Definitions:

 Leasing Company- Vehicle Financing Organisation who is into lending of vehicle.

 Lessee - IIFL who borrows /hires for and on behalf of employees.
 Lease Rentals - Lease rentals for each tranche/window shall be fixed for the entire tenor. Any change
in the rate will be informed in advance.
 Leasing Amount - Ex-Showroom Price + Insurance + RTO registration + Road Tax + Octroi + depot
handling and any other charges at dealer.
 Residual Value – Market value .
 Term- Number of years the car is used before replacement is 4 yrs or 48 months.
 Km’s usage for the month / year / term- Standard Km usage across the board is 15,000 km’s p.a. Any
cost due to excess run shall be debited to the employee.
 Accessories- Anything over and above provided by the car dealership/leasing company will have to be
separately incurred by the employee.
 Road tax- It will be collected within the Lease Rentals.
 Insurance-The Insurance premium is collected within the Lease Rentals, so no separate charge would
be applicable.
 Accidents & Repairs-
- Leasing company shall handle Accident damage repairs and will liaison with Insurance company in this
regard.
 The employee shall furnish all the relevant documents like the FIR copy if requirement / damage
intimation form / RC copy and Insurance copy .In case of total loss and theft , FIR copy is mandatory
from the nearest police station and the No Trace Report in case of theft only.
- Total loss due to accident: Employee to bear the difference between the IDV ( Insurance Declared
Value ) and the Net Present Value ( as determined by the leasing company ). Employee shall also file
FIR and handle all legal proceeding.

Page 1
 - Theft of the car: Employee to bear the difference between the IDV ( Insurance Declared Value ) and
the Net Present Value ( as determined by the leasing company ). Employee shall also file FIR and
handle all legal proceeding.
 Maintenance & Repair (Optional)-
- Leasing company shall cover all scheduled maintenance and running repairs for the term and will also
cover any unplanned maintenance in case of Fleet Management services opted.

5. Eligibility:

Employees drawing CTC of Rs. 10 Lacs per annum or above will be eligible for Car Lease Scheme.

6. Entitlements:

The overall cap for Lease rental EMI, reimbursement of Fuel, Driver, Maintenance and telephone if any as per
ERA guidelines would be @ 25% of CTC . Employee Entitlements for each component with upper cap are
detailed below:

CTC INR 10 Lacs and above

(a) Car Lease rental limit * 20 % of CTC or the Actual Lease Rental Value; whichever
is lower.

(b) Fuel** Rs. 1,80,000 p.a.

(c) Driver’s Salary Rs. 1,80,000 p. a.

(d) Repair & Maintenance*** Rs. 36,000 p. a.

*Limit can be flexible downwards. Unclaimed entitlement will be paid as part of Supply (Fixed Allowance).
** The values will be fixed as constant and will not change with any change in fuel prices.

*** Repairs entitlement will be considered only in case where car lease is opted without maintenance option
under car lease scheme.

7. Mechanism for employee payment towards car lease rental:

A fixed monthly rental (as per entitlement) will be adjusted from employees salary and paid to Leasing
Company every month. Employees will be eligible to avail Fuel, Driver Salary & Maintenance reimbursement
and the same will be carved out of employee’s cash salary. Any un-availed amount of Fuel, Driver Salary &
Maintenance Reimbursement will be paid back as part of taxable salary at the end of the year.

Registration of Car will be in the city wherein the employee is posted.

Page 2
8. Taxation:
For provision of Company car on lease and reimbursement of petrol & maintenance expenses, every month
the following values will be considered as a perquisite and taxed accordingly with reference to Rule
3(2)(A)(1)(c)(i) of Income Tax. (Rentals & petrol, driver reimbursements will be non-taxable)
Car details Perk amount per month
Upto 1.6 litres 1800+900 (driver)=2700
Above 1.6 litres 2400+900 (driver) =3300

9. Process Flow:

a) Employee interested for Car Lease Scheme of the IIFL to apply for the same to Leasing Company
through their local HR contact in the desired format (please refer appendix -1).
b) Leasing Company to contact Employee for the desired make of Car.
c) Employee on finalising the car has an option to negotiate and finalise the deal with the dealer else
advise Leasing Company to finalise the deal.
d) On finalising the deal, Leasing Company to acquire the vehicle and lease it to the IIFL at the Lease
Rentals of onward usage to its employee.
e) Lease rentals as determined by the car lease vendor based on the option chosen by the employee.
It will be reduced from the Fixed Allowance of the employee subject to entitlement.
f) IIFL will make the payments of lease rentals to the car lease vendor
g) The deductions will start from the month in which the delivery of the car is taken, if the date of
delivery is on or before the 15th of the month. If the date of delivery is after the 15th of the month,
the deduction will start from the following month.

10. Changes in Salary Structure of Employee on opting for Car Lease Scheme:

On opting for Car Lease Scheme,

- Conveyance allowance of Rs 1,600/- will be discontinued and added to Supply (Fixed Allowance).
- Fuel, Driver and Maintenance component will be culled out from Supply ( Fixed Allowance ).
- Lease Rental amount will be reduced from Supply (Fixed Allowance).

11. Grievance Handling

The policy as such is to provide focus on many things such as cost control, Company Car choice, Health and
Safety at Work Regulations and Government legislation. Supporting the needs of Leased Company Car through
adoption of effective fleet management practices and procedures is also the responsibility of the company.

If you have any questions on the Policy please contact your Local HR team member.

Page 3
12. Policy guidelines

The following information should be noted:

When using any Leased Company Car, you must comply with the terms detailed in this Policy and the leasing
company’s user guide and Manufacturer’s Owner’s Manual. The user guide will be provided by the leasing
company to all the users

All accidents / incidents / damage incurred MUST be reported immediately to the leasing company. The
employee will be responsible for all types of traffic violations / accidents and all liabilities with relation to the
use and possession of the vehicle A detailed investigation will be carried out on all accidents / incidents, The
decision of the IIFL management related to the above cases will be final and binding on the employee .

You should NOT change your Company Car without prior authorisation from the HR department.

13. Extra fitment / Accessories:

Any additional fitment / accessories fitted on the company leased car cannot be removed unless agreed in
writing by us at the time of ordering the Car.

14. Taxation

Any present or future taxation to be paid by the employee for the provision of the company car .

15. RETURNING YOUR COMPANY CAR

If you are returning your car due to completion of lease period or due to leaving the employment of IIFL (either
on resignation or on termination for any reason), you must ensure that you carry out the following
instructions.

 Remove any personal belongings.

 Leave the Manufacturers handbook in the glove box.
 Remember to hand back both sets of keys plus key fobs or any other necessary documents ( eg. RC
book )
 It should be noted that failure to return both sets of keys may result in a charge under the unfair wear
& tear policy.

A member of the Fleet Management Team will complete a condition report upon return of your leased
company car at which you can be present. If any damage is noted you will be advised and you will then have
the opportunity to check the condition report against the vehicle before it leaves the premises.

In case of early termination of lease contract (either on resignation or termination of service for any reason)
prior to completion of lease period, Employee will need to pay the amounts as specified in the Optiflex Matrix
provided by the leasing company and return the car to them.

Page 4
16. BUYING THE CAR

At the end of the lease period the vehicle must be delivered back to ALD Automotive Private Limited.
However, ALD Automotive shall give the user of the vehicle first right of refusal to buy the vehicle if he/ she
inform us of his/ her intention to do the same at least one (1) months before the End of the Lease Period. This
buy of car option shall be granted only with a condition that the vehicle is bought at the highest Resale Price
fetched by ALD Automotive after minimum three bids. Such amounts plus applicable tax must be remitted to
ALD Automotive within seven (7) days from the day ALD agrees on the sale price.
In case of early termination of lease contract (either on resignation or termination of service for any reason), If
the employee choose to buy the car then Employee will need to pay the amounts as specified in the Optiflex
Matrix provided by the leasing company and Market value of the car plus applicable tax.

16. Reference:

You are requested to read the FAQ’s on Car policy for any clarity on the above points.

Appendix 1 :- Car Leases Application Format for Employee

Lessee Details

Employee / User Details

Name Department
Email Id Employee No./Code
Residence Tel Number Mob No.
Date of Birth Yrs with Lessee:
Driving Licence No. & validity of DL
Residence Address
Pin code:

Page 5