In the previous chapter we studied the impact of proposed tax rates and concluded it is more in favour of the rich and not for middle income group. A similar view has also been expressed by group of Senior Income Tax Officials in which they have stated “under the garb of providing long term stability in the tax regime, the tax code in fact would widen the rich-poor gap and create more economic absurdities”[BS.21/09/09] In this chapter we propose to discuss the impact of the new code on the salaried persons who are the most efficient tax payers of this country.

SUMMARY OF CASE LAW Transport facility provided to an employee from his residence to office and office to residence is not a perquisite within the meaning of section 17(2) of IT Act, 1961.

New Direct Tax code 2009 has proposed to tax many benefit, receipts, allowances and perquisites which are either tax free or exemption is available in respect of that. We are discussing here some of these provisions.

SUMMARY OF CASE LAW The Income-tax Act exempts the gratuity amount to the extent of limit prescribed under the said Act; there is no distinction between the gratuity paid under the Payment of Gratuity Act, 1972 or otherwise CASE LAW DETAILS Decided by: HIGH COURT OF KARNATAKA, In The case of: North West Karnataka Road Transport [...]

Currently, certain prescribed fringe benefits provided by an employer to his employees are liable to FBT in the hands of the employer. Such fringe benefits are not included within the scope of ‘perquisites’ as defined in section 17. As FBT will now be abolished, ‘perquisites’ will include the following: 1. Presently, FBT is levied on [...]

51. Whether expenditure incurred during in-house employee training would be considered as conference expense and liable to FBT? The FBT is not envisaged for levy on the expenditure incurred for the purposes of imparting in-house training to employees. However, FBT would be payable on any expenditure incurred towards food and beverage, tour and travel, and [...]

32. Whether gross expenses or net expenses (i.e. net of recovery) are to be considered for the purposes of FBT? For example, part of the expenses on various items like travel, may be recovered from the employees. Therefore, whether FBT would be levied on the gross travel expenditure or on the ‘net’ travel expenditure’? Where [...]

Payment for transfer of right to use software loaded on hardware – not a royalty; Making available other personnel to subsidiary under control and supervision – constitutes Service PE. Background Lucent Technologies International Inc. 1(“the assessee”) is a company incorporated in the USA. It is a tax resident of USA. It is a leading supplier [...]

The Delhi Income-Tax Tribunal has held that valuation of perquisite determined by the assessee relying on interpretation of Taxman’s Direct Taxes Ready Reckoner, the assessee could not be deemed to be an assessee-in-default and consequently, interest under section 201(1A) could not be levied though the valuation methodology was held not justified.

VALUATION of perquisites has always been a bone of contention. To overcome many of such irritants, the Finance Minister in the Finance Act, 2007 had inserted a deeming provision to define concession in the matter of rent for the purpose of determining the perquisite value. It has also reduced the rate of valuation of perquisite in the nature of concessional rent accommodation and leased accommodation with retrospective effect from 1 st day of April, 2006, that is with effect from assessment year 2006-2007. This had necessitated similar reduction of rates in case of both rent-free and concessional rent accommodations and leased accommodation in Table I of rule 3 with retrospective effect from 1 st day of April, 2006, that is in relation to assessment year 2006-2007 and subsequent years.