With the introduction of FBT, the whole provisions regarding taxation of erquisites/fringe benefits can be summarised as follows
(A) Perquisites Taxable in the hands of Employees
The perquisites which can be directly attributed to employees will continue to be taxed in the hands of the employer in accordance with the existing provision of section 17(2) of the Income Tax Act, 1961 subject to the method of valuation outlined in rule 3 of the Income Tax Rules, 1962.
(B) Perquisites Liable to FBT
In the following cases the perquisites given by employer to employees are laible to FBT in the hands of employer
(a) The perquisites which are not attributable individually to employees, or
(b) The perquisites which are not taxable in the hands of employer.