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Comprehensive FBT chart

Comprehensive FBT chart

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Published by: cajitendergupta on Jul 17, 2008
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01/11/2011

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Scope of Fringe Benefit Tax (FBT) and the effective tax rate for financial year 2008-09
(The figures in brackets in the table below represent the question number in Circular 8/2005, which has been answered by CBDT)
S. No.(a)Nature of expense(b)Illustrative list of expenses included(c)Illustrative list of expenses excluded(d)Value of FringeBenefit(e)Effective FBTrate(f)=(e)*33.99%
1
1Superannuation fund
-
up to rupees one lakh per employee
-
approved gratuity or provident fund (38)100%33.99%2Entertainment
-
exhibition, performance, amusement,game or sport, amusement andgratification (49)20%6.798%3Provision of hospitality-reimbursement of expenses toemployees for food or beverages availed by employee in office or factory (52)
-
food or beverages provided by employer to employees in office or factory (52)-payment through paid vouchers usableonly at eating joints
-
non transferable prepaid electronic mealcards usable only at eating joints (Refer  Note 6)20%6.798%4Conference (including in-house training (51), training programmes organized bytrade bodies or institutions(54), conferences of theagents or dealers or development advisors (56))
-
conveyance, tour and travel (includingforeign travel), on hotel, or boardingand lodging in connection with anyconference
-
 participation fee paid for the employees, provided it does not include any paymenttowards entertainment, provision of hospitality, sales promotion andscholarships (55)20%6.798%5Sales promotion including publicity-expenditure on brand-refer Annexure A20%6.798%6EmployeesWelfare
-
annual reimbursement for medicalexpenses up to Rs 15,000 (69)-books and periodicals (75)
-
annual reimbursement for medicalexpenses exceeding Rs 15,000 (69)-fulfilling any statutory obligation-mitigating occupational hazards20%6.798%
1
FBT is payable at the rate of 30 per cent of the value of the Fringe benefit plus applicable surcharge and education cess. Surcharge at the rate of 10 per cent is payable in case income of the Company is greater than Rs 10,000,000
 
S. No.(a)Nature of expense(b)Illustrative list of expenses included(c)Illustrative list of expenses excluded(d)Value of FringeBenefit(e)Effective FBTrate(f)=(e)*33.99%
-
 prizes / rewards for achievements (76)
-
education / transport to children of employees (72, 77)
-
group personal accident / workmancompensation insurance, if not astatutory obligation (68)
-
 provision of first aid facilities in hospital /dispensary run by the employer (71)-lease rent for lease of accommodation for staff (48)
 Additions vis-a- vis earlier year 
(Refer  Note 6):-to provide crèche facility for employees’children,-to sponsor a sportsman being an employee-to organise sports events for employees7Conveyance
2
-
reimbursement of car expenses on the basis of bills submitted and driver’ssalary (78)
-
rent for hiring or leasing of motor-cars(82)
-
free or subsidized transport for journeys toemployees from their residence to the place of work or such place of work to the place of residence (104)20%6.798%8Use of hotel, boarding andlodging facilities
-
expenditure incurred by a company (sayEYPL) for executing VW’s assignmentand VW reimburses EYPL for such ‘outof pocket’ expenses (12)20%6.798%9Repair, running (includingfuel), maintenance of motor cars and the amount of depreciation
3
thereon20%6.798%
2
Depending upon the facts, expenses may be classified under conveyance (effective tax rate 6.798%) or under tour and travel (effective tax rate 1.6995%).Generally speaking, reimbursement of out of Pune travel expense would be classified under ‘Tour and travel (including foreign travel). Insofar as hotel expenseson travel are concerned, there is a view that such expenses should be covered under the head ‘Use of hotel, boarding, and lodging facilities.
3
Depreciation as per the Income Tax Act (and not Companies Act) to be taken basis for determining the quantum of advance FBT
 
S. No.(a)Nature of expense(b)Illustrative list of expenses included(c)Illustrative list of expenses excluded(d)Value of FringeBenefit(e)Effective FBTrate(f)=(e)*33.99%
10Use of telephone (includingmobile phone)
-
telephone installed in the office in nameof the company, mobile phones, (90)
-
leased telephone lines20%6.798%11Maintenance of anyaccommodation in thenature of guest house No FBT shall be payable under this head (Refer Note 6)12Festival celebrations
-
meeting / get-togethers of employeesand their family members on theoccasion of any festival (eg Christmasnew year)
-
celebration of Independence Day andRepublic Day (95)20%(Refer  Note 6)6.798%13Use of health club andsimilar facilities-entrance or membership fee of a club ohealth club or similar facility (96)50%16.995%14Use of any other clubfacilities
-
entrance or membership fee of a club or health club or similar facility (96)50%16.995%15Gifts
-
gifts under trade schemes or for  promotion of company’s products todistributors / retailers (97)
-
a gift to a customer (98)-gift in cash / kind (100)50%16.995%16Scholarships
-
education of employees sent to aneducational institution50%16.995%17Tour and travel (includingforeign travel)
4
-
Expenses incurred on outstation travel
-
expenditure incurred by a company (sayEYPL) for executing VW’s assignmentand VW reimburses EYPL for such ‘outof pocket’ expenses (12)
-
expense incurred by a professional like alawyer or auditor and reimbursed as out-5%1.6995%
4
Depending upon the facts, expenses may be classified under conveyance (effective tax rate 6.798%) or under tour and travel (effective tax rate 1.6995%).Generally speaking, reimbursement of out of Mumbai travel expense would be classified under ‘Tour and travel (including foreign travel). Insofar as hotelexpenses on travel are concerned, there is a view that such expenses should be covered under the head ‘Use of hotel, boarding, and lodging facilities.

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