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Vehicle Loan Policy

The Vehicle Loan Policy allows staff employees up to the grade of Manager to obtain a vehicle loan for personal and official use, with specific eligibility criteria and loan amounts based on gross salary and years of service. Loans are interest-free but subject to perquisite tax, and repayment must be completed in 60 installments. Employees must adhere to conditions regarding vehicle ownership, loan repayment upon resignation, and re-eligibility for future loans.

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9 views2 pages

Vehicle Loan Policy

The Vehicle Loan Policy allows staff employees up to the grade of Manager to obtain a vehicle loan for personal and official use, with specific eligibility criteria and loan amounts based on gross salary and years of service. Loans are interest-free but subject to perquisite tax, and repayment must be completed in 60 installments. Employees must adhere to conditions regarding vehicle ownership, loan repayment upon resignation, and re-eligibility for future loans.

Uploaded by

gauravrai709
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Policy Name Vehicle Loan Policy

Policy Number SSWL/HR/14


Effective date of Issue 01st Jan, 2023
Effective date of Implementation 01st Jan, 2023
Review date 01st Jan, 2024
Issue No. 01

Vehicle Loan Policy

Objective
To facilitate employees to avail a Vehicle on loan for personal and official purpose.

Eligibility
All Staff employees up to the grade of ‘Manager’ who have completed minimum 4 years of continued service with
the organization post regularization.

Details
The Company will provide all staff employees up to the grade of Manager the facility to avail a vehicle loan.

The entitlement rates of the employees are given below in the table:

Level Gross Salary Subject to Maximum Years of Service Loan Towards


Below Assistant Manager 4 months gross salary INR 1.5 LPA 4 years 4 – wheeler/ 2 - wheeler
Assistant Manager to Manager 4 months gross salary INR 3.5 LPA 4years 4 – wheeler

Disbursement of Loan
• Loan will be disbursed directly to employee account.
• Loan of INR 1.5 LPA and 3.5 LPA will be sanctioned towards the purchase of both old as well as new vehicle in
line with the grade of the employee.
• Incase employee would require loan for purchase of old vehicle, he/she need to submit the fair value of vehicle
from an authorized dealer.
• Employees below Assistant Manager grade can purchase either a 4 – wheeler or a 2-wheeler.
• Loan will be sanctioned only if all deductions put together (inclusive of vehicle loan) do not exceed 50%
(excluding Income Tax and Provident Fund deduction) of the gross salary.
• Employee need to submit the undertaking that he should not sell the vehicle until Loan repayment is not done.

Recovery Mechanism
• Loan repayment will be made in 60 equated monthly installments

Rate of Interest
• Loan will be given free of interest. However, Perquisite tax* will be applicable as per Income Tax Act

* “Perquisite” may be defined as any casual emolument or benefit attached to an office or position in addition to
salary or wages. Perquisite amount i.e. Loan amount at the beginning of year- reducing balance + SBI lending rate in
1st April for this category, will be added to your gross taxable earning for TDS calculation for the year.

Ownership
• The Vehicle will be in the employee’s name
• Copy of Registration Certificate to be submitted to HR Department
• After completion of documentation i.e. sanction letter and loan agreement on stamp paper, accounts/Head
office shall disburse the loan amount in employee account

Re-eligibility

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• The next Vehicle loan can be availed only after 5 years of disbursement of first Vehicle loan, even if the loan is
repaid in less than 5 years

Upon Resignation

• In case an employee decides to leave the services of the company before depositing all EMI’s as per specified
numbers, the outstanding loan amount due to the company shall be deducted from the Full and final
settlement
• If the balance amount due to the company exceeds full and final settlement, same needs to be immediately
deposited by the employee to the organization

Modus Operandi

• The employee is required to fill up the loan form (available on ESS) and once the approval from the Department
Head and Plant Head is taken, same needs to be further approved by the location HR Head, Corporate HR, ED
(C)/DMD and MD

Other Terms and Condition

• Monthly budget of all staff vehicle loan shall not exceed 20 lakhs
• The application will be processed on monthly basis in one single process for group as a whole at corporate
office
• All the loans sanctioned will be disbursed on one the day as per funds sanctioned by Finance department
• All the loans will be processed within the guidelines of the policy, any deviations will be referred to MD of
the group for consideration, whose decision will be final
• The Vehicle under Hypothecation/Loan with the company cannot be transferred/sold to any other person
till the re-payment of the Loan is completed
• If employee has taken General Loan or any other loan except exigency loan then employee’s eligibility to
avail vehicle loan will be reduced by the amount outstanding against other loan taken from the company.

Disclaimer

This policy shall be called “Vehicle Loan Policy”. The company reserves the right to cancel or amend all or any of
these rules mentioned in the policy and issue supplementary rules or amend to these rules without prior notice and
give effect to them from the date of issue or any other date.

The right to interpretation thereto will be of the Company.

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