Author : Sachin Gujar, Chartered Accountant

1. Fringe Benefit Tax Author : Sachin Gujar, Chartered Accountant

2. FRINGE BENEFIT TAX UNDER CHAPTER XII - H • Rationale behind Fringe Benefit Tax (FBT) • Directly attributable benefits are taxable as perk in the hand of employee • Collective enjoyment of benefits which may involve a personal benefit, are taxable in the hand of employer Meaning of Fringe Benefit (FB) Side benefits that accompany or are in addition to a person’s regular compensation • Amendment in Section 17(2)(vi) to exclude fringe benefits provided in chapter XII – H • There will be no change in the tax treatment of elements chargeable under Salary except Perquisites • Perquisites provided under Rule - 3 may be taken as exempt in the hands of Employer

3. Definitions (Section – 115W) (a) “Employer” includes – • a company; • a firm; • An AOP/ BOI, excluding fund/ trust/ institution(s) eligible for exemption under Section 10(23C) or registered under Section 12AA • A local authority and • every artificial judicial person ( b) “Fringe benefit tax” or “tax” means the tax chargeable under section 115WA.

4. Charge of FBT (Section – 115WA) 1. A fringe benefit tax be charged in respect of the fringe benefits • provided or • deemed to have been provided by an employer to his employees • At the rate of thirty per cent on value of such fringe benefits. 2. The tax on fringe benefits shall be payable even if no tax is payable by employer under the Act. Fringe Benefits have been divided into two parts 1. Fringe Benefits – defined under section 115WB(1) 2. Deemed Fringe Benefits (Presumptive nature of FBT i.e. there need not be any benefit to employee except in case of employees welfare ) – defined under section 115WB(2)

5. FRINGE BENEFIT – Meaning & Valuation Fringe Benefit - Section – 115WB(1)

6. FRINGE BENEFIT – Meaning & Valuation Deemed Fringe Benefit - Section – 115WB(2)

7. FRINGE BENEFIT – Meaning & Valuation

8. FRINGE BENEFIT – Meaning & Valuation Deemed Fringe Benefit - Section – 115WB(2)

9. FRINGE BENEFIT – Meaning & Valuation

10. FRINGE BENEFIT – Meaning & Valuation SECTION – 115WB(3) For the purpose of Section – 115WB(1), any privilege, service, facility or amenity does not include perquisites in respect of which tax is paid or payable by the employee or any benefit or amenity in the nature of free or subsidies transport or any other allowance provided by Employer to his Employees on to or from journey from residence to office of the Employees.

11. ADVANCE TAX – SECTION 115WJ PROCEEDURE FOR FILING RETURN – SECTION 115WD Same proportion, same due dates and same method of computing interest for delay in payment of advance tax on Income - will apply to advance FBT. Interest @ 1% per month or part of the month, is to be paid for short fall in tax for the period for which the short fall continues - For Companies and other entities whose accounts are to be audited – 31st October - For others - 31 July • One Month from the date of issue of notice where AO issues notice to a defaulting employer. • A defaulting employer may file return up to one year from the end of relevant assessment year or before the completion of assessment whichever is earlier. • A revise return can be filed up to one year from the end of assessment year

12. OTHER PROCEEDURAL REQUIREMENTS • Assessment (Section – 115WE) • Best Judgment Assessment (Section – 115WF) • Fringe Benefit Escaping Assessment (Section – 115WG) • Issue of notice where Fringe Benefits have escaped assessment (Section – 115WH) • Payment of Fringe Benefit Tax (Section – 115WI) • Advance Tax in respect of Fringe Benefits (Section – 115WJ) • Interest for default in furnishing return (Section – 115WK) • Application of other provisions of this Act (Section – 115WL)

13. THANK YOU