The penalty provisions of section 271FB of the Income Tax Act applies to all the employer (who paid fringe benefits to its employees) who fails to furnish the ‘return of fringe benefits’ as required under section 115WD (1) of the Income Tax Act. The said penalty provisions of section 271FB are taken up and explained in the current article.

Please note- The fringe benefits tax (FBT) was the tax applied to most, although not all, fringe benefits in India. A new tax was imposed on employers by India’s Finance Act 2005 from the financial year commencing April 1, 2005. The fringe benefit tax was abolished in the 2009 Union budget of India by the then Finance Minister Pranab Mukherjee

Understanding provisions of section 271FB of the Income Tax Act

The penalty provisions of section 271FB levies penalty under the following circumstances –

  • An employer, who has either paid or has made provision for payment of fringe benefits to its employee during the previous year, is required to file a ‘return of fringe benefits’ as per provisions of section 115WD (1) of the Income Tax Act.
  • In case the employer fails to furnish the required ‘return of fringe benefits’ within the prescribed time limit. Then, the Assessing Officer may direct such defaulter to pay the penalty under section 271FB.

Understanding provisions attached with ‘return of fringe benefits’

Fringe benefit simply means the benefits in addition to an employee’s wages. Provisions of section 115WD (1) mandate every employer, who has either paid or made provisions for payment of fringe benefits to its employees, to furnish the return of fringe benefits within the following prescribed due date –

Type of employer Due date
A company or

A person (other than a company) whose accounts are required to be audited under the Income Tax Act or under any other law.

30th September
Any other employer. 31st July

No penalty in case of the reasonable cause –

Provisions of section 273B of the Income Tax Act states that no penalty would be levied under section 271FB even in case the employer fails to furnish the return of fringe benefits, if the employer proves that there was a reasonable cause for the said failure.

Amount of penalty payable under section 271FB of the Income Tax Act –

Provisions of section 271FB states that the defaulter would be liable to pay the penalty amount of INR 100 per day till the failure continues.

Read Also:-

S. No. Title
1 Section 272BB Penalty for failure to comply section 203A provisions
2 Section 272B Penalty for failure to comply with provisions of PAN
3 Section 272AA Penalty for failure in complying with provisions of section 133B
4 Section 272A Penalty for failure to answer questions or furnish information / returns/ statements or allow inspections etc
5 Section 271J Penalty on professionals for furnishing incorrect information in reports / certificates
6 Section 271I Penalty for failure in furnishing Form 15CA & Form 15CB
7 Section 271H Penalty for late filing/non-filing of TDS or TCS return
8 Penalty for failure in furnishing report or furnishing inaccurate report under section 286 – Section 271GB
9 Section 271GA Penalty for failure in furnishing the information / document in Form 49D as required under section 285A
10 Section 271G Penalty for failure to furnish information / document as per provisions of section 92D
11 Section 271FB Penalty for default in furnishing return of fringe benefits
12 Section 271FAB Penalty for failure to furnish statement / information / document by an eligible investment fund
13 Penalty for providing inaccurate statement of financial transaction or reportable account- Section 271FAA
14 Section 271FA Penalty for failure in furnishing statement of financial transactions or reportable account
15 Section 271E Penalty for contravening provisions of section 269T
16 Section 271DB | Penalty for contravening provisions of section 269SU
17 Section 271DA Penalty for contravening provisions of section 269ST
18 Section 271CA Penalty for failure to collect tax at source (TCS)
19 Section 271D Penalty for contravening provisions of section 269SS
20 Section 271C Penalty for failure / non-deduction / non-payment of TDS
21 TDS Rate Chart for AY 2020-21 and AY 2021-22
22 Section 271BA Penalty for failure to furnish section 92E report
23 Section 271B Penalty for failure to get accounts audited
24 Section 271AAC Penalty in respect of certain specified income
25 Section 271AA Penalty for failure to maintain Transfer Pricing documents
26 Section 271A Penalty for failure to keep / maintain or retain books of accounts, documents
27 Section 270A(1) Penalty for under-reporting & misreporting of income
28 Section 269SU Acceptance of payment through electronic modes
29 Section 234F Late fees for default in filing of income tax return
30 Section 234E Late Fee for default in filing of TDS / TCS returns
31 Section 158BFA(2) – Penalty on undisclosed income for block period
32 Section 140A(3) Penalty for non-payment of self-assessment tax

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