Fringe Benefit Tax

Section 271FB Penalty for default in furnishing return of fringe benefits

Income Tax - 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 […]...

TDS is deductible on ESOP

Income Tax - Employee Stock Options Plans (ESOPs) and its different variants like Employees Stock Purchase Plans, Stock Appreciation Rights, Stock Awards, etc, have been used by employers to attract, retain and motivate employees. ESOPs have been popular primarily in the knowledge-based industries like information technology, biotechnology, etc. Howev...

Announcement relating to taxation papers for students appearing in May 2010 examination PE-II [Income-tax and Central Sales Tax], PCC/IPCC [Taxation], Final (Old) Course [Direct Taxes] and Final (New) Course [Direct Tax Laws]

Income Tax - Consequent to abolition of fringe benefit tax, certain benefits taxed earlier as fringe benefits in the hands of the employer would now be taxable as perquisites in the hands of the employees. For this purpose, new perquisite valuation rules have been notified vide Notification No.94/2009/ F.No.142/25/2009-S.O.(TPL), dated 18.12.2009 wit...

Perks & Jerks for Employees!

Income Tax - With virtually no reprieve from the tax burden on their pay packages and continuing anomalies and inequities, the new rules for valuation of perquisites announced by the Central Board of Direct Taxes (CBDT) on December 18, 2009 have hugely disappointed millions of salaried employees....

FBT First Instalment of June Quarter Paid-Refund or Adjustment?

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 corporate assessees had already paid the first instalment under the belief that the Finance Bill has yet to be accorded consent by the President and is not final. The advance tax in respect of FBT which was paya...

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DTC not expected to be presented in upcoming budget

Income Tax - The Direct Taxes Code 2009 is now on the back burner. The Union finance ministry has veered round to the view that its bold move to reform direct taxes should be subjected to further scrutiny. Contrary to earlier expectations, therefore, the Direct Taxes Code 2009 will not be presented to Parliament as a Bill along with the Union Budget f...

Adjustment of Advance FBT with Advance Tax for A.Y. 2010-11

Income Tax - The Central Board of Direct Taxes have decided that any instalment of advance tax paid in respect of fringe benefits for assessment year (AY) 2010-11 shall be treated as advance income tax paid by assessee for AY 2010-11. The assessee can adjust such sum against its advance tax obligation in respect of income for Financial Year (FY) 2009-...

Income tax refunds may get delayed by a fortnight

Income Tax - Income tax refunds may get delayed for a fortnight, following a complete revamp of security buffers in the computer software system of tax departments across the country, after the discovery last week that someone had hacked into an account and made off with Rs 11 crore....

CBDT may allow companies to adjust the FBT paid against the advance tax due in the March quarter

Income Tax - The government will allow companies to adjust the fringe benefit tax (FBT) paid by them against the advance tax due in the March quarter, reducing the hazard of claiming a refund and slightly improving profits at a time of rising costs, said an income-tax department official. “The Central Board of Direct Taxes has taken an in-principle...

Perquisite Valuation rules not considered the inflation and old exempt amount limit been kept

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 — 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...

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FBT on providing Free Medicine Samples to Doctors by Pharma Companies

PCIT Vs Aristo Pharmaceuticals P Ltd (Bombay High Court) - Since there was no employer-employee relationship between the assessee on one hand and the doctors on the other hand to whom the free samples were provided, the expenditure incurred for the same cannot be construed as fringe benefits to be brought within the additional tax net by levy of fringe bene...

Uniform Allowance to staff not Taxable under Fringe Benefits

Mumtaz Hotels Limited Vs DCIT (ITAT Kolkata) - Mumtaz Hotels Limited Vs DCIT (ITAT Kolkata) CIT(A) opined that the said clothes were not protective ones and they are not uniforms and not compulsory uniform under the statute. We find that the employees’ uniforms have traditionally been used as a functional necessity. It is noted from the record...

Exercise of revisional jurisdiction u/s 263 for adjustment of FBT in book profit

Rashtriya Chemicals & Fertilizers Limited Vs. CIT (ITAT Mumbai) - Rashtriya Chemicals & Fertilizers Limited Vs. CIT (ITAT Mumbai) Taxes borne by the assessee on non-monetary perquisites provided to employees forms part of Employee Benefit cost and akin to Fringe Benefit Tax since they are certainly not below the line items since the same are expressively disal...

ITAT not levied penalty on CA Firm for not paying FBT on traveling & conveyance Expenses of Articled Clerks

M/s. Gujrani & Co. Vs. ITO (ITAT Kolkata) - M/s. Gujrani & Co. Vs. Income Tax Officer (ITAT Kolkata) It is observed that the audit expenses of Rs. 5,19,238/- were claimed to be incurred by the assessee- company towards traveling and conveyance of the Articled Clerks, who were C.A. students receiving training from the assessee- firm. It wa...

Reimbursement of expense to Director by Company is not Taxable as Perquisite

Gaurav Seksaria Vs. ITO (ITAT Kolkata) - Gaurav Seksaria Vs. ITO (ITAT Kolkata) Reimbursement of expense incurred during foreign visit to Director by Company is not taxable as Perquisite It is not in dispute that the assessee employee had not claimed any expenditure as deduction which were incurred by him through credit card during his f...

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Circular on adjustment of Advance FBT Paid for Assessment Year 2010-11

Circular No. 2/2010-Income Tax - (29/01/2010) - Circular No. 2/2010-Income Tax The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT) on the value of certain fringe benefits as contained in Chapter XII H (Sections 115 W to 115 WL) of Income Tax Act, 1961. By the Finance (No. 2) Act, 2009 a new Section 115 WM was inserted to abol...

Government Put Conditions on Issue of Prepaid Meal Card

Notification No. 1/2009 - Income Tax - (05/01/2009) - Notification No. 1/2009 - Income Tax The Finance Act, 2008, w.e.f. from 1 April 2008, introduced a new concept of Electronic Meal Cards (‘EMC’), for the purpose of Fringe Benefit Tax (‘FBT’) on hospitality expenses. Hospitality expenses do not include any expenditure incurred by an employer...

FBT on ESOPs – CBDT amends Rule 40C

Notification No.11/2008-Income Tax - (18/01/2008) - NOTIFICATION NO 11/2008, Dated: January 18, 2008 Valuation of specified security not being an equity share in the company. 40D. For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security, not being an equity share in a company, on the date on...

Notification on Valuation of ESOP for FBT

264/2007 - (23/10/2007) - NOTIFICATION NO. 264/2007, DATED 23-10-2007 Valuation of specified security or sweat equity share being a share in the company. 40C. (1) For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security or sweat equity share, being an equity share i...

Extension of Due Date of Payment of The First and Second Installment of Advance FBT on ESOPS

EXTENSION OF DUE DATE OF PAYMENT OF THE FIRST AND SECOND INSTALLMENT OF ADVANCE FBT ON ESOPS - (12/09/2007) - By virtue of the provision of clause (d) of sub-section (1) section 115 WB, introduced by Finance Act, 2007, an employer is liable to pay Fringe Benefit Tax on any consideration for employment provided by way of any specified security or sweat equity shares allotted or transferred, directly or indir...

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