FBT......................

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This query is : Resolved

Prakash (Querist)

21 November 2008 Dear Sir,

We are giving daily allowance Rs.100 per day as per attendence wise to our sales executive for visiting to distributor,fooding, conveyance & others. So tell me sir, FBT required to pay on this daily allowance.

Ravikumar.G

Ravikumar.G (Expert)

21 November 2008 If it is a allowance, a form part of salary. It is taxable in the hands of employee. Hence No FBT.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

21 November 2008 If the terms of employment so provides, it is part of salary and hence no FBT is payable.

Prakash

Prakash (Querist)

21 November 2008 Dear sir,

We have not mention this daily allowance their appointment letter. We pay this daily allowance through separate voucher. We exclude this daily allowance from any statutory deduction and not showing this amount in pay slip. So, is it required to pay FBT on this?

Ravikumar.G

Ravikumar.G (Expert)

21 November 2008 If there is any fixed allowances to employees without any reimbursements, not including salary and not the expenses actually incurred by the employee it will be treated as Fringe benefits. Taxable value u/s 115WC is actual value. (Ie 100%) (not 20% or 5%).

Guest

Guest (Expert)

21 November 2008 what max. you can do is that you could ask form your sales executive a supporting showing that they has made real expenditure and you are rembursing the same.

by this you can avoid your FBT liability and this amount is also not taxable in the hand of your employees, further you could very leagly claim the expenditure through your profit and loss account.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

22 November 2008 It is in the nature of reimbursement and it seems that the same is not a component of salary payable to such employess. In such a case FBT will have to be paid.

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