Advance FBT for MAT calculation

This query is : Resolved

naveen.m (Querist)
Follow

16 April 2009 Is advance FBT paid is considered as an allowable expenses while calculating MAT, if yes let me know the notification

Thanks & Regards

Naveen

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
Follow

16 April 2009 No, It is not allowable.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
Follow

16 April 2009 Note that the Fringe Benefit tax will not be allowed as a business deduction and therefore advance tax also will not be considered as business expenditure.

While calculating mat the Frige benefit tax will be diallowable expenditure from profit and loss account.

taxindiaconnect

taxindiaconnect (Expert)
Follow

01 May 2009 The FBT is a tax liability of the company, hence the covered under clause (a) of the explanation 1 to subsection 2 of section 115JB of the Act. FBT advance is noit a P& L Account items should not be allowed to deducted for the purpose of computation of book profits u/s 115JB.

for FBT expenditure charged to P & l Account Circular 8/2005 has clarifed the position as following
103. Whether FBT would be allowable deduction while computing book profit under section 115JB?

FBT is a liability qua employer. It is an expenditure laid out or expended wholly and exclusively for the purposes of the business or profession of the employer. However, sub-clause (ic) of clause (a) of section 40 of the Income-tax Act expressly prohibits the deduction of the amount of FBT paid, for the purposes of computing the income under the head profits and gains of business or profession. This prohibition does not apply to the computation of book profit for the purposes of section 115JB. Accordingly, the FBT is an allowable deduction in the computation of book profit under section 115JB of the Income-tax Act.

Thus allowable.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok