FRINGE BENEFIT TAX

1. FRINGE BENEFIT TAX

2. Introduction to Fringe Benefit Tax..!!!!

3. Requirement For Fringe Benefit TaxU/S-115WA • The FBT is payable by an Employer. • The Employer is liable only if he has an Employee. • Employer is liable only if he has provided Fringe Benefit and/or is deemed to have provided Fringe Benefit to his employees. • FBT is payable at the Rate of 30% (plus applicable Surcharge plus Education Cess) of the Value of Fringe Benefit Provided. • FBT is payable irrespective of whether “Employer” is liable to pay Income-Tax on his total income or not.

4. Employer Includes: Company. Firm. Association of persons or a Body of individual. A local authority Every artificial Juridical Person. Employer Excludes: Individual & HUF. Fund/Trust/Institution eligible for Exemption u/s-10(23). Fund/Trust/Institutions registered u/s-12AA A Political Party registered u/s 29A Definition Of Employer U/S-115W(a)

5. Computation of Fringe Benefit Tax Liability & Rates. • 30% on the Value of Fringe Benefit- u/s-115WC Add:- Surcharge: Rates • For AOP/BOI: If FB does not exceeds 1000000 Nil If FB exceeds 1000000 10% • Artificial.J.Person,Domestic Co.,Firm 10% • Non-Domestic Co. 2.5% • Local Authority Nil Add:- Education Cess: 2% on [Tax+Surcharge]

6. Fringe Benefit Expenses..!!! • Covered u/s-115WB(1) • Any Privilege, Service, Facility or Amenity Whether provided Directly or Indirectly, or whether by way of reimbursement to Employee.. • Any Free or Concessional Ticket provided by the employer for private Journeys of the employee’s or his family. • Expenses spent towards contribution in Superannuation Fund.. Which is exempted upto the limit of 100000

7. Entertainment. Provision of Hospitality. Conference. Sales Promotion & Publicity. Employee’s Welfare. Conveyance. Use of Hotel,Boarding,Lodging Facilities. Repairs,Running,Maintenance of Motor Car & the amount of Depreciation thereon(including Fuel) Repairs,Running,Maintenance of Aircrafts & the amount of Depreciation thereon(including Fuel). Telephones (including Mobiles) Guest House. Festival Celebrations. Health Club. Other Club Facilities. Gifts. Scholarships Tour & Travels (including Foreign travels) Deemed Fringe Benefit..!!!Covered u/s-115WB(2)

8. Includes: Exp in-connection with exhibition, performance,amusement,game or sports. Reimbursement of expenses. Exp on non-festive occasions. Purchase of ticket for charity Shows,sports event. Exp on Firecracker on Annual day. Excludes: Exp on festive-occasion. “Entertainment” u/s-115WB(2)(A)Rate-20%

9. Includes: Food & Beverages After office hours. In-house training. other than employees with in office. In hotel business-drinks to customer as welcome drink. Training center-(temporary) Excludes: To employees with in office or factory. Paid vouchers Training center –(permanent) “Provision for Hospitality” u/s-115WB(2)(B) Rate-20%

10. Includes: Conveyance,tour,travel on hotel or boarding & lodging in connection to a conference. Programs organized by Trade bodies or institutions. Complementary exp to participation fee. Conference for agent & dealers. Excludes: Fee’s for participation by em’ee in any conference. “Conference” u/s-115WB(2)(C)Rate-20%

11. Includes: If research done by own self for market or product. Free offers,free samples of products,exp on artwork or royalty. Winning trips by customer or client (travel+lodging+boarding) Distribution of free trade samples. Excludes: Brokerage & selling Com. Exp on salesman(being em’ee) Rebates,discount & bonus points on credit card. Incentives to distributor. Market or product research from outside agency. Exp on call centers as post sale services. Exp on ad-films. “S.P & Publicity” u/s-115WB(2)(D)Rate-20%

12. Includes: Group personal accidents/ workmen compensation insurance/ group health insurance/ group medical n life insurance (under non-statutory obligation). Reimbursement by em’er on medical treatment not exceeding 15000. Injuries Subsidy Various exp in em’ees colony. Book & periodical to em’ee Prize, rewards, awards. Transport facility. Excludes: Payment against Statutory obligation. Gratuity fund Medical exp above 15000 Treatment of injuries-”statutory obligation” Construction site. “Employee’s welfare” u/s-115WB(2)(E) Rate-20%

13. Includes: Exp for clients business reimbursed. Leave travel concession Reimbursement of car exp. Rent paid for operating lease. Excludes: Allowance for journey from home to work place. Allowance Professional travels. (reimbursement) “Conveyance” u/s-115WB(2)(F)Rate-20%

14. Includes: Pre-diem allowance. On hotel,boarding,lodging. Excludes: Fixed hotel allowance. “Use of Hotel,Boarding & Lodging Facilities”u/s-115WB(2)(G) Rate-20%

15. Includes: Repairs. Running(including fuel). Maintenance. Depn on motor cars. Lease rent – financial lease Garage rent Drivers salary Int. on loan. Excludes: Car excludes: Delivery vans Display vans Tempos Trucks Buses Tractor Ambulance But includes Jeep. “Repairs,Running,Maintenance of Motor Car” u/s-115WB(2)(H) Rate-20%

16. Includes: Repairs. Running(including fuel). Maintenance. Depn on Aircrafts. Lease rent – financial lease Garage rent salary Int. on loan. Excludes: For em’er engaged in carriage of passengers/ goods. “Repairs,Running,Maintenance of Aircraft” u/s-115WB(2)(I) Rate-20%

17. Includes: All except exclusions. Excludes: Exp on leased Telephones. “Telephones(including Mobile)” u/s-115WB(2)(J) Rate-20%

18. Includes: Food in G.H Contract charges Rent Maintenance charges Rent or Hire charges to hotel if stay exceeding 182 days. Excludes: Exp on refrigerator, t.v, furniture, etc Depreciation on G.H Maintenance exp for training purpose. “Guest house” u/s-115WB(2)(K)Rate-20%

19. Includes: Meeting/get together on festive occasions. Excludes: On independence day or republic day. “Festival Celebrations” u/s-115WB(2)(L) Rate-50%

20. Includes: Hotel resort providing health & fitness facility. Subscription for membership in club Fitness centers, health saloon, gymnasium, massage centers, slimming center, aerobics. Excludes: “Use of health club & similar facility” u/s-115WB(2)(M) Rate-50%

21. Includes: Entrance fee Reimbursement of exp Excludes: Depreciation on club building Fixed club allowance. “Use of any other Club facility” u/s-115WB(2)(N) Rate-50%

22. Includes: In cash In kind Trade promotion scheme (with different product) Customers Marriage or others Any other person. Excludes: “Gifts” u/s-115WB(2)(O)Rate-50%

23. Includes: To em’ees & others. Em’ees sent to educational institutions. Awarded to student or trainee. Excludes: “Scholarship” u/s-115WB(2)(P)Rate-50%

24. Includes: Only traveling fair can be claimed. Excludes: “Tour,Travel (Including Foreign Travel)” u/s-115WB(2)(Q) Rate-5%

25. Industry Specific Amendments..!!!

26. Other Propositions..!!!-1 • Employer is a must. • No segregation of expenses incurred on em’ees or others. • Capital or Revenue Expenditure. • Preoperative Expense. • Expenditure to be Calculated on Due Dates • Net expenses to be considered in case of recovery from employees. • Cost Sharing agreement with group companies. • Disallowance u/s-37,40,40A & 43B.

27. Other Propositions..!!!-2 • Bogus Expenditure. • FBT in case of depreciation. • Reimbursement of expenditure by Client. • Accounting Records. • FBT not Deductible – as per sec – 40(a)(ic). • FBT deductible for computing Book Profits-[115JB] • Credit of FBT Paid by a foreign co. in the country of residence.

28. Advance Tax due date..!!!

29. Section List

30. Updations…!!!

31. Case Laws…!!! • Infosys – dating exp reimbursed by em’er • kingfisher airways & Air deccan: Indirect benefits provided. "Awake, Arise and Stop not , till the goal is achieved."

32. Thank You!