Using company credit card for personal expenses — will it show as taxable salary?

Question

Hi all, I'm Suresh Babu, working as a senior engineer in a mid-size IT firm in Chennai. CTC is around ₹18 LPA, take home roughly ₹1.1L per month. My company recently gave me a corporate credit card and my manager casually said 'use it for whatever, we'll sort it out later.' I used it for a family dinner (₹4,500) and booked a personal Uber once or twice.

Now I'm getting a bit nervous. My HR sent a mail asking us to submit expense reports. If I can't justify these personal spends as business expenses, what happens? Will the company add it to my salary as a perk? Will it show up in Form 16 as a perquisite? I've read somewhere that perquisites above a certain amount get taxed. Is ₹4,500–₹5,000 even worth worrying about? Or does this become an issue only above some threshold?

Also planning to file ITR myself this year for the first time using ClearTax. Don't want any surprises. Someone please explain this simply.

Answer 1

Honestly, you're right to be a little nervous but don't panic — the amount is small and what happens next depends entirely on how your company's accounts team handles it.

Here's how it works. When you use a company credit card for personal expenses and the company ends up bearing that cost, it becomes a **perquisite** in your hands under Section 17(2) of the Income Tax Act. The company is supposed to add this to your taxable salary and reflect it in Form 16 under the 'Perquisites' head. Your employer will also pay Fringe Benefit Tax — wait, no, FBT was abolished years ago. Now the entire tax burden on perquisites falls on you, the employee.

So practically speaking — if you spent ₹4,500–₹5,000 and the company bills it as a business expense internally (maybe under 'employee welfare' or 'miscellaneous'), honestly a lot of companies just absorb small amounts. Many HR teams don't want the paperwork headache for such tiny spends.

But if they don't absorb it, they'll ask you to either reimburse the card or add it to your salary. If added to salary, your tax impact at your income level (you're probably in the 30% slab after standard deductions) would be roughly ₹1,500 on ₹5,000. Not the end of the world.

What most people get wrong here: they think company credit card = free money. It's not. Every unreconciled expense is a liability either for you or the employer. Some companies run quarterly reconciliations and flag anything personal. Others are lax. Your company just sent an HR mail — that's a signal they're doing it properly.

My suggestion: go to your HR or accounts team now, before the reconciliation closes. Either reimburse the ₹4,500–5,000 directly to the company account, or get clarity that they're okay absorbing it. Get the response in writing on email.

For your ClearTax filing — if the amount does appear in Form 16 under perquisites, ClearTax handles it cleanly, just enter it as shown. Don't try to hide or modify Form 16 figures, the system auto-populates from AIS/Form 26AS anyway.

Just pay back the amount. Sleep well. Move on.