Budget and the FBT

This query is : Resolved

sanath (Querist)
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11 July 2009 It is common knowledge that the FBT has been abolished Starting 1st APR 2010. But a specific clause has also been added to 17(2
) saying Fringe benefits shall be taxed as perquisites hereinafter.
In a nutshell, 115WB(1)(D) says that all sales promotion activity will be liable to FBT.
Expenditure on festival celebrations happening in an organisation was liable to FBT earlier. Now, should an employee pay tax for something like a festival celebration happening in an organistaion, which is not organised/planned by him?
The funnier aspect of this, is the fact that the same expenditure becomes deductible from the revenue earned and only the remaining is taxable.
I understand a clarification on the above points is due to come, but don't you think, in a budget, the Finance Minister must have reasonable homework before spelling out anything.
This, in my opinion is shoddy crazy work!
Atleast a notification to clarify the same must have been issued.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 July 2009 Section 17(2)(viii) reads as follows:-
the value of any other fringe benefit or amenity as may be prescribed.

So forget about section 115 WB(1)(D) etc and wait for the prescription of the Hon. FM.

Rajesh

Rajesh (Expert)
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11 July 2009 FBT has been abolished wef 1st APR 2009

Please check accordingly

sanath

sanath (Querist)
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11 July 2009 What?!?! April 2009 uh?

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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11 July 2009 Yes. FBT abolished from Financial Year 2009-2010. And what the FM meant by that fringe benfits shall be taxable to employees is meant that fringe benefits which can be directly attributable to employee as Fringe benefit shall be taxable in his hands as the situations were eralier when FBT was not in existence. Definitely, it shall not cover all expenses as were covered in FBT. But I dont think anything funnier in this. All the provisions can never be given in budget. Budget only contains changes in provisions. Rules shall be framed accodingly soon and brought for the general public. So instead of making any comments like this, we should wait and watch.