4. Feature Of Fringe Benefits Tax"[ Assessments of 'Fringe Benefits' ]

 

On the basis of analysis of 115W to 1I5WL and the circular No. 8/2005, issued by CBDT, the following are the important features of ‘Fringe Benefits Tax’

1.         Applicable with effect From. The FBT is applicable with effects from pervious year 2005- 06, i.e., Assessment year 2006-07. In other words, the fringe benefits provided or deemed to have been provided by employer to employees on or after 1-4-05 are chargeable to FBT.

2.         Chargeable to specified Employer. FBT is chargeable on specified employer as defined under section 11 5W(a). The term ‘Employer’ includes—

(i)         a company;

(ii)        a firm;

(iii)       an association of persons or BOl, whether incorporated or not;

(iv)       a local authority; and

(v)        every artificial juridical persons, not falling within any of the preceeding sub-clauses.

The above employers are liable to FBT if they are engaged in business or profession or any activity, whether or not such activity is carried on with the object of deriving income, profits or gains.

It implies that individual employers (Sole proprietors) and Hindu undivided family employers are not liable to pay FBT.

The above mentioned employers are liable to pay FBT if

 

(i)        the Fringe Benefits are provided to employees and

 

(ii)       the employees are based in India.

 

The employees may be full time or part time, permanent or temporary. However, where a business house provides fringe benefits to persons other than employees, it is not liable to FBT. For example where Fringe benefits are provided to professionals like consultants, advisors, lawyers, who are not the employees but work in independent professional capacity, the employer is not liable to pay FBT.

 

Note. FBT will be applicable on foreign companies if they have employees based in India.

 

3.       Chargeable on specified fringe benefits. Section 1 15WB(1)

defines the fringe benefits to mean any privilege, service, facility or amenity, directly or indirectly, provided by an employer, whether by way of reimbursement or otherwise to his employees (including former employees). It will also include any free or concessional ticket provided by the employer for private journey of the employees or their family members; and any contribution by the employer to an approved superannuation fund of employees.

Further, Section 1 15WB(2) has prescribed a list of expenses, which if incurred by employer shall be treated as fringe benefits to employee.

 

4.       Valuation of Fringe benefits.

Some of the fringe benefits are to be valued at cost to employer i.e., the actual amount spent by the employer on empldyees shall be treated as the value of fringe benefits provided. However, in respect of certain expenses, where the benefit is not directly attributable to employees a specified percentage of actual expenditure shall be treated as the value of fringe benefits provided to employees. For example 20% of actual expenditure incurred on entertainment by an employer, shall be treated as value of fringe benefits provided to employees.

 

5.       Rate of FBT.

FBT is chargeable at the rate of 30% on value of fringe benefits provided during the previous year.

 

6.       FBI is a presumptive Tax.

It is a persumptive tax because in respect of certain expenses incurred by employer, a certain proportion is presumed to have been incurred on employees as a fringe benefits to them. The acutal expenditure on fringe benefits may be more or less than the value of fringe benefits calculated on the presumptive basis.

 

7.       FBT is not an allowed business expense.

FBT paid is not allowed as deduction for the purpose of computing the income under ‘Profits and Gains of Business or Profession’.

 

8.       FBT and MAT.

FBT paid is an allowable deduction while computing ‘book profits’ u/s 115JB under MAT.

 

9.       FBT in addition to Income Tax.

FBT is an addition to income tax payable by the employer.

 

10.     Return of Fringe Benefits.

The employers covered under FBT are liable to file a return of ‘fringe benefits’ provided to employees during the previous year. This return has to be submitted within due dates as prescribed under section 139(1) of Income Tax Act, 1961.

 
 

More Topics... @ FBT
Assessment of Fringe Benefit Tax (FBT) - An Introduction
Rationale And Meaning Of ‘Fringe Benefits Tax’ : Assessments of ' Fringe Benefits'
Perquisites Taxable In The Hands Of Employees V/S Fringe Benefits Tax : Assessments of ' Fringe Benefits'
Feature Of Fringe Benefits Tax : Assessments of ' Fringe Benefits'
Meaning Of Certain Expressions [ Section 115W] : Assessments of ' Fringe Benefits'
Charge Of Fringe Benefit Tax [Section 115WA ] : Assessments of ' Fringe Benefits'
Fringe Benefits [Section 115WB] : Assessments of ' Fringe Benefits'
Some Examples of Fringe Benefits : Assessments of ' Fringe Benefits'
Some Examples Of Benefits Which Are Not Fringe Benefits : Assessments of ' Fringe Benefits'
Value Of Fringe Benefits [Section 115WC] : Assessments of ' Fringe Benefits'
Advance Tax In Respect Of Fringe Benefits : Assessments of ' Fringe Benefits'
Return Of Fringe Benefits [Section 115WD] : Assessments of ' Fringe Benefits'
Assessment Of Fringe Benefits [Section 115WE ]
Best Judgement Assessment [Section 115WF ] : Assessments of ' Fringe Benefits'
Time Limit - Completion Of Assessment U/s-115WF-Sec-153 Amendment
Fringe Benefits Escaping Assessment [Section 115WG] : Assessments of ' Fringe Benefits'
Section 115WH :Issue Of Notice Where Fringe Benefits Have Escaped Assessment
Payment Of Fringe Benefit Tax [Section 115WI ] : Assessments of ' Fringe Benefits'
Advance Tax In Respect Of Fringe Benefits [Section 115WJ ] : Assessments of ' Fringe Benefits'
Interest For Default In Furnishing Return Of Fringe Benefits [Section 115WK]
Computation Of Interest U/S 115WK—Amendment In Section 140A(1A)]
Claim Of Refund Under Fringe Benefit Tax [Section 238(1A)]
Period Within Which Refund Of Tax Paid Under Fringe Benefits Tax Can Be Claimed [Section 239(2)] : Assessments of ' Fringe Benefits'
Interest On Refund Under Fringe Benefit Tax [Section 244A(1) and (3)] : Assessments of ' Fringe Benefits'
Appeal To Commissioner (Appeals)[Section 244A(1)(AA)] : Assessments of ' Fringe Benefits'
Penalty For Non Complying With The Notice [Section 271(1)(b) & (d)] : Assessments of ' Fringe Benefits'
Penalty For Failure To Furnish Return Of Fringe Benefits [Section-271FB] : Assessments of ' Fringe Benefits'
Penalty For Non-Furnishing Of Quarterly Return U/S 206(a) [Section 272a(2)] : Assessments of ' Fringe Benefits'
Prosecution For Not Furnishing Of Return U/S 115WD(1) or u/s 11WH(1) [Section 276CC] : Assessments of ' Fringe Benefits'
Abetment Of False Return Filed U/s-115WD(1) or U/s 115WH(2)[Section-278] : Assessments of ' Fringe Benefits'
Amendment Of Section 119 [Section-115WL] : Assessments of ' Fringe Benefits'
 
Tax Tutorials
E-Payment Of Direct Taxes
Filing Of Return Of Income
Interest for Delay in Filing the Return of Income [Section 234 A]
Interest for default in Payment of Advance Tax [Section 234B]
Provisions Of 'Income-Tax Law' Useful For Non-Residents
MAT (Minimum Alternate Tax)
AMT ( Alternative Minimum Tax)
Tax On Long-Term Capital Gains (LTCG)
Tax On Short-Term Capital Gains (STCG)
Exemption[ Section-54] For Capital Gains Arising On Transfer Of Residential House Property
Tax Treatment Of Gifts Received By An Individual Or HUF
Set Off And Carry Forward Of Loss Under The Income-Tax Act
Interest For Delay In Payment of TDS/TCS And For Non-Payment Of Tax Demanded
Tax Deduction/Collection Account Number (TAN)
How to apply for PAN ?
Refund Of Excess Tax Paid By The Taxpayer (Sections - 237 to 245 )
Presumptive Taxation Scheme of Section 44AD
Presumptive Taxation Scheme of Section 44ADA
Presumptive Taxation Scheme of Section 44AE
Deduction in respect of Life Insurance Premium, PPF, NSC, etc. [Section 80C]
Deduction in respect of Medical Insurance Premium [Section 80D]
Tax Deducted at Source (TDS) from Interest, other than Interest on Securities (Section-194A)
Tax Deducted at Source (TDS) from Interest on Securities (Section 193)
Late Filing Fees And Penalty For Failure To Furnish/Delay In Furnishing The TDS/TCS Statements
 
 
GST (India)
F.A.Q. on GST
GST Forms Download
GST Compensation Law
GST Enrollment Process
GST Law & Act.
GST Rules
GST Schedule ( I to V )
IGST Law & Act.
GST A Practical Knowledgebase
Filing GST Return
Enroll & Registration with GST
GST Office Tool to File GST Return
LIBRARY @ Tax Management
TAX & INVESTMENT GUIDE FOR "NRI"- Non-Resident Indians !
GUIDE & FAQ @ TAX
GRAPHICAL PRESENTATION @ TAX
TIPS & TRICKS @ TAX
MANAGERIAL & FINANCIAL DECISIONS @ TAX
5 GOLDEN RULES OF TAX PLANNING
FAMILY TAX PLANNING
DEDUCTIONS FROM YOUR INCOME
EXEMPTED INCOMES
HUF - FORMATION, MANAGEMENT & TAX PLANNING
COMPUTATION OF GROSS TOAL INCOME
INCOME TAX @ GLANCE
MULTIPLE KNOWLEDGEBASE ON TAX
51 TIPS ON TAX PLANNING
APPEALS UNDER INCOME TAX
ASSESSMENTS
PENALTIES UNDER IT DEPATMENTS
TAX SAVING SCHEMES
TAX READY RECKONER
TAX RATES
PROSECUTIONS UNDER INCOME TAX DEPARTMENT
TAXATION SYSTEM IN INDIA
CHARITABLE & RELIGIOUS TRUST - TAXATION
PRESCRIBED FORMS WITH with Section / Rules
 
TAX @ KNOWLEDGE BASE !

Most Popular Links :

Clubing of Income Deduction U/s 80C
Allowances Us-17(3) Exemption-Salary
Tax Amendment-2015 Taxable Income
Clubing of Income Tax Deductions
HUF Deduction HUF Investment
Gift by HUF HUF Tax Planning Tips
Tax Saving Schemes Tax Planning Tips
Refund of Tax Fringe Benefit Tax-FBT
Return Filing Assessment / Scrutiny
Notice from I.T. Dept. Incomes Types @ TDS
Exemptions-Tax Returns “Summon” U/s 131
'Black Money' @ I.Tax Big Gifts To Be Taxed
'Appeals' under I.Tax Assessment @ I.Tax
Exempted Incomes Capital Gain
Business & Professions House Property
Salaries @ I.Tax Partnership Firm
'Penalty' under I.Tax Act. Tax Ready Reckoner
Charitable Trust Useful Links @ I.Tax
 
 
 
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
Charitable & Religious TRUST NRI (Tax Planning,Saving,Investemnt) Tax Tutorials GST (FAQ, Law, Act. Rules, Schedule, Enrollment)
FAQs - Income Tax India    

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications

Tally.ERP9 Book Online Order Tally.ERP9 Book Content