Vehicle Loan - Interest Reimbursement Scheme
PURPOSE
The policy aims to facilitate employees to procure a vehicle with reimbursement of interest amount by the organization.
SCOPE
This policy is applicable to all the units of the __________ Group.
PROCEDURE
The entitlement for the reimbursement of 100 % interest amount of loan shall be as per the amount mentioned against each category:
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CATEGORY
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MAXIMUM LOAN AMOUNT CAN BE AVAILED FROM BANKS / FINANCIAL INSTITUTION
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MINIMUM SERVICE REQUIRED
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Level IV
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35,000/-
or
80% of the cost of two wheeler, whichever is lower
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1 Year
|
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Level V
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2,00,000/-
or
80% of the cost of car, whichever is lower
(In case Level V employee wish to buy two wheeler, he/she can avail the loan as per clause applicable to level IV)
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1 Year
|
|
Level VI
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2,50,000/-
or
80% of the cost of car, whichever is lower
(In case Level VI employee wish to buy two wheeler, he/she can avail the loan as per clause applicable to level IV)
|
1 Year
|
The eligible employee can get the vehicle financed through the finance company, as per the norms mentioned in the above table. Installment will be paid by the employee, the company will pay interest part of the loan. Employee will ensure that Interest rate charged by the finance company should be negotiated and not more than prevailing market rate of interest.
Reimbursement of interest amount will be as per following criteria:
a. Loan amount will not be more than prescribed limit. If loan amount is more than prescribe limit, reimbursement of interest will be done on the basis of prescribed limit.
b. The duration of loan period will not be more than 36 months.
Interest subsidy that is given to individual is liable for taxation. Employee has to bear tax in this regard.
The concerned employee will intimate to Accounts Department, who will consider the value of perquisites while computing his taxable salary.
If promoted during the course of the loan, employee should complete current cycle and go for enhanced finance upon completion of the cycle only.
Employees who leave their service from the Group, prior to the repayment of the entire loan, reimbursement of interest amount will only applicable till the time he/she works for the organization.
It will be the responsibility of the concerned employee to bear the total cost towards the petrol and maintenance etc. and he will be entitled to the rates per km. for using his vehicle for official purpose as per the policy of the company.
For getting the reimbursement of interest of loan sanctioned, the concerned employee shall be making the application to his Departmental Head who will recommend the same to the HRM Department. The Accounts Department shall counter sign the recommendation as per the policy of the company and thereafter it will go to SBU Head for approval.
Employee can claim reimbursement of interest of loan either quarterly, half yearly or annually on submission of finance company statement clearly showing interest amount.