Income Tax : Employee Stock Options Plans (ESOPs) and its different variants like Employees Stock Purchase Plans, Stock Appreciation Rights, St...
Income Tax : The Finance Bill (No.2), 2009 could be presented on Sixth of July, 2009 due to formation of new government but by that time many c...
Income Tax : New perk rules :- Under the new perquisite rules, a distinction is to be made between the car owned by the employer and the car ow...
Income Tax : Employee stock options (ESOPs) is a significant employer-granted benefit that too is subject to the above FBT /perquisite-based ta...
Income Tax : Valuation of Perquisites under Rule 3 of Income Tax Rule 1962 read with sub section 2 of section 17 of Income Tax Act, 1961 (As Re...
Income Tax : During the period April-November 2010, net direct tax collections stood at Rs.2,16,628 crore, up from Rs.1,83,822 crore during the...
Income Tax : Net direct tax collections during the period April-September 2010 stood at Rs.1,81,758 crore, up from Rs.1,52,625 crore in the sam...
Income Tax : Net direct tax collections during first four months of the present fiscal (up to July 2010) stood at Rs.85,647 crore, up from Rs.7...
Income Tax : Net direct tax collections during first eleven months of the present fiscal (up to February 2010) stood at Rs.2,78,373 crore, up f...
Income Tax : The fringe benefit tax (FBT) was strongly opposed by India Inc, but there is no doubt that it was beneficial to the employees — ...
Income Tax : In the case of Piramal Enterprises Ltd vs DCIT, ITAT Mumbai directed deletion of Fringe Benefit Tax (FBT) addition on business pro...
Income Tax : Dive into Prakash Industries Ltd vs ACIT case dissected by ITAT Delhi, detailing FBT exemptions for transport services and medical...
Income Tax : Bilfinger Neo Structo Pvt. Ltd. Vs ACIT (ITAT Ahmedabad) As regards ground relating to Employees Welfare Expenses includible in va...
Income Tax : Delhi High Court directs rectification of Amex India's tax assessment, orders refund of Rs. 45.60 crore. Get insights into the ru...
Income Tax : Singareni Colleries Company Ltd Vs ACIT (ITAT Hyderabad) AR of the assessee submitted that the amount of electricity provided to t...
Income Tax : Net direct tax collections during first quarters of the present fiscal (up to June 2010) stood at Rs.68,675 crore, up from Rs.59,4...
Income Tax : Circular No. 2/2010-Income Tax The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT) on the value of certain fr...
Income Tax : Notification No. 1/2009 - Income Tax The Finance Act, 2008, w.e.f. from 1 April 2008, introduced a new concept of Electronic Meal...
Income Tax : NOTIFICATION NO 11/2008, Dated: January 18, 2008 Valuation of specified security not being an equity share in the company. 40D. Fo...
Income Tax : NOTIFICATION NO. 264/2007, DATED 23-10-2007 Valuation of specified security or sweat equity share being a share in the company. 40...
New perk rules :- Under the new perquisite rules, a distinction is to be made between the car owned by the employer and the car owned by the employee, as the value of the tax perquisite in the two scenarios varies considerably. Even though there could be different permutation and combination, under which the car benefit could be provided by the employer to the employee, this article primarily focuses on two scenarios where the car is either owned by the employer or employee and the car expenses are met/reimbursed by the employer.
The fringe benefit tax (FBT) was strongly opposed by India Inc, but there is no doubt that it was beneficial to the employees — they did not have to directly bear the tax on many perquisites. The repeal of FBT meant uncertainty on taxation of perks. Thankfully, there are few changes to the valuation rules when compared to the rules that existed prior to the introduction of FBT.
Employee stock options (ESOPs) is a significant employer-granted benefit that too is subject to the above FBT /perquisite-based taxation system. In fact, it almost seems as if the authorities cannot quite make up their minds as to how they wish to tax shares given to employees by their employers on a concessional basis. Having been subject to various changes in their valuation norms, the following is the latest position:
The salaried class, reeling under the inflationary pressures, has suffered yet another setback this holiday season with the announcement of new perquisite valuation rules by the Central Board of Direct Taxes (CBDT) on December 18. The new rules have come in the wake of the abolishment of fringe benefit tax (FBT) by finance minister Pranab Mukherjee in this year’s Budget and will be applicable retrospectively from April 1, 2009.
Valuation of Perquisites under Rule 3 of Income Tax Rule 1962 read with sub section 2 of section 17 of Income Tax Act, 1961 (As Revised wide Income Tax (Thirteenth Amendment) Rules. 2009). The Finance (No. 2) Act, 2009, has withdrawn the levy of Fringe Benefit Tax (“FBT”) on expenditure incurred by an employer on or after 1 April 2009. Consequently, by an employee benefits which were subject to FBT have been brought back within the ambit of perquisites and taxable in the hands of employees from the financial year (“F.Y.”) 2009-10 onwards.
For the sake of convenience, the attached tables summarises the valuation rules for all perquisites prescribed in the new rule 3 except the valuation of perquisites in respect of accommodation, motor car and ESOP which are mentioned separately by us and link for the same is been given below . It may be noted that for most perquisites the valuation rules which were contained in the old Rule 3 (as it applied to those employees who, or to items of perquisites which, were not subject to FBT) have remained unchanged. 1. New Perquisite rules in respect of accommodation / house property provided by employer including accommodation in hotel.2. New rules for valuation of perquisites for use of motor car by staff for personal use – provided by employer.3. Valuation of perquisites in respect of employee stock option (ESOP) for the financial year 2009-2010.
The much awaited new rules have now been notified by The Central Board of Direct Taxes (CBDT) vide Notification dated 18 December 2009. The amended provisions will be retrospectively effective from 1 April 2009 onwards. The new valuation rules as prescribed by CBDT and the comparative analysis with the earlier perquisite rules (Rule 3) have in respect of accommodation provided by employer including in respect of accommodation in hotels is tabulated as under:
Salaried employees may burn a hole in their pockets with the Government all set to impose tax on all perks –residential accommodation, conveyance and others — paid for by the company, under a new law that replaces the already abolished Fringe Benefit Tax. Perquisites given by the employer such as residential accommodation, conveyance facility and other benefits to the family of the employee could soon be added to their salary for income tax purposes and the Government may come out with a notification soon on the valuation of these perks.
Absence of tax-free climate has affected inflows of foreign investment in the shipping sector, reducing its competitiveness, the government informed Rajya Sabha. “The Indian flag suffers from certain barriers in terms of tax and duty structures which may have impeded the growth of foreign direct investment (FDI),” shipping minister GK Vasan told Rajya Sabha. As per him new taxes in the form of service tax, FBT etc reduced its competitiveness.
Net direct tax collections during first eight months of the present fiscal (up to November 2009) stood at Rs.1,83,822 crore, up from Rs.1,77,251 crore in the same period last fiscal, registering a growth of 3.71 percent. Growth in Corporate Taxes was 3.17 percent (Rs.1,13,210 crore as against Rs.1,09,735 crore), while Personal Income Tax (including STT, and residual FBT and BCTT) grew at 4.53 percent (Rs.70,262 crore as against Rs.67,215 crore).
