FBT

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FRINGE BENEFIT TAX
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Introduction to Fringe Benefit Tax..!!!!
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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.

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Definition Of Employer U/S-115W(a)

• 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

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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 TaxSurcharge

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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 employees
  or his family.
• Expenses spent towards contribution in
  Superannuation Fund.. Which is exempted upto the
  limit of 100000

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Deemed Fringe Benefit..!!!Covered u/s-115WB(2)

• Entertainment.
• Provision of Hospitality.
• Conference.
• Sales Promotion Publicity.
• Employees 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)

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Entertainment u/s-115WB(2)(A)Rate-20

• 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.

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Provision for Hospitality u/s-115WB(2)(B)
Rate-20

• 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)

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Conference u/s-115WB(2)(C)Rate-20

• 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
• Fees for participation by emee in any
  conference.

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S.P Publicity u/s-115WB(2)(D)Rate-20

• 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
  (travellodgingboarding)
• Distribution of free trade samples.

• Excludes
• Brokerage selling Com.
• Exp on salesman(being emee)
• 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.

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Employees welfare u/s-115WB(2)(E) Rate-20

• Excludes
• Payment against Statutory obligation.
• Gratuity fund
• Medical exp above 15000
• Treatment of injuries-statutory obligation
• Construction site.

• Includes
• Group personal accidents/ workmen compensation
  insurance/ group health insurance/ group medical
  n life insurance (under non-statutory
  obligation).
• Reimbursement by emer on medical treatment not
  exceeding 15000.
• Injuries
• Subsidy
• Various exp in emees colony.
• Book periodical to emee
• Prize, rewards, awards.
• Transport facility.

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Conveyance u/s-115WB(2)(F)Rate-20

• 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)

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Use of Hotel,Boarding Lodging
Facilitiesu/s-115WB(2)(G) Rate-20

• Includes
• Pre-diem allowance.
• On hotel,boarding,lodging.

• Excludes
• Fixed hotel allowance.

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Repairs,Running,Maintenance of Motor Car
u/s-115WB(2)(H) Rate-20

• Excludes
• Car excludes
• Delivery vans
• Display vans
• Tempos
• Trucks
• Buses
• Tractor
• Ambulance
• But includes Jeep.

• Includes
• Repairs.
• Running(including fuel).
• Maintenance.
• Depn on motor cars.
• Lease rent financial lease
• Garage rent
• Drivers salary
• Int. on loan.

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Repairs,Running,Maintenance of Aircraft
u/s-115WB(2)(I) Rate-20

• Excludes
• For emer engaged in carriage of passengers/
  goods.

• Includes
• Repairs.
• Running(including fuel).
• Maintenance.
• Depn on Aircrafts.
• Lease rent financial lease
• Garage rent
• salary
• Int. on loan.

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Telephones(including Mobile) u/s-115WB(2)(J)
Rate-20

• Includes
• All except exclusions.

• Excludes
• Exp on leased Telephones.

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Guest house u/s-115WB(2)(K)Rate-20

• 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.

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Festival Celebrations u/s-115WB(2)(L) Rate-50

• Includes
• Meeting/get together on festive occasions.

• Excludes
• On independence day or republic day.

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Use of health club similar facility
u/s-115WB(2)(M) Rate-50

• Includes
• Hotel resort providing health fitness facility.
• Subscription for membership in club
• Fitness centers, health saloon, gymnasium,
  massage centers, slimming center, aerobics.

• Excludes

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Use of any other Club facility u/s-115WB(2)(N)
Rate-50

• Includes
• Entrance fee
• Reimbursement of exp

• Excludes
• Depreciation on club building
• Fixed club allowance.

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Gifts u/s-115WB(2)(O)Rate-50

• Includes
• In cash
• In kind
• Trade promotion scheme (with different product)
• Customers
• Marriage or others
• Any other person.

• Excludes

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Scholarship u/s-115WB(2)(P)Rate-50

• Includes
• To emees others.
• Emees sent to educational institutions.
• Awarded to student or trainee.

• Excludes

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Tour,Travel (Including Foreign Travel)
u/s-115WB(2)(Q) Rate-5

• Includes
• Only traveling fair can be claimed.

• Excludes

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Industry Specific Amendments..!!!
Employers engaged in the business of Hospitality Conveyance Hotel Boarding lodging Repairs, running, Maintenance n Depn
Hotel 5
Construction 5
Manufacture n Production of Pharmaceutical. 5 5
Manufacture n Production of Computer Software. 5 5
Carriage of Passengers/goods by Motor Car 5 5 5
Carriage of Passengers/goods by Aircraft. 5 5 NIL
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Other Propositions..!!!-1

• Employer is a must.
• No segregation of expenses incurred on emees 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.

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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.

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Advance Tax due date..!!!
Quarter Due Dates
Apr-Jun On or before 15th July
July-Spet On or before 15th Oct
Oct-Dec On or before 15th Jan
Jan-Mar On or before 15th Mar(Before the quarter ends)
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Section List
Sections List
115WA 115WB 115WC 115WD(1) 115WE 115WF 115WG 115WH 115WI 115WJ 115WK 115WL Requirements of FBT Fringe Benefit Expenses Value of Fringe Benefits Return of FB Assessment Best Judgment Assessment FB Escaping Assessment Issue of notice where FB have Escaped Assessment Payment of FBT Advance Tax in respect of FB Interest for default in furnishing return of FB Application of Other provisions of this act.
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Updations!!!
Top 10 FBT Payers of India Top 10 FBT Payers of India Top 10 FBT Payers of India
Companies FBT(fig in cr) As of employee expense.
SBI 88.5 1.1
IOC 38.9 1.5
RIL 37 3.1
ICICI 36.9 2.3
HLL 35 5.4
SAIL 26.5 0.5
BHARTI 25.5 2.2
TCS 17.8 0.3
ITC 16.1 2.5
TISCO 16 1.1
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Case Laws!!!

• Infosys dating exp reimbursed by emer
• kingfisher airways Air deccan
• Indirect benefits provided.
• "Awake, Arise and Stop not , till the goal is
  achieved."

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Thank You!