FBT calculation

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P.Gopinath (Querist)
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06 December 2008 Can anyone tell the situational difference between Food & Beverage and staff welfare in calculating FBT?I know staff welfare liable to FBT whereas Food & Beverage not.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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06 December 2008 Food and beverages expenses are covered u/s115WB(2)(B). It includes expenditure on tea, coffee, refreshments, alcoholic/nonalcoholic drinks, lunch, dinner, brunch etc., (ref:-page 47of Taxmann's Taxation of FBT 4th edn.)

Staf welfare is covered u/s115WB(2)(E). But it is not defined in the act. One can, therefore, take natural meaning from dictionaries. By virtue of explanation to the said section expenditure other than the following comes under the tax net.
1)Any expenditure incurred or payment made to fulfill any statutory obligation.
2)Any expenditure incurred or payment made to mitigate occupational hazards.
3)Any expenditure incurred or payment made to provide first aid facilities in a hospital or dispensary run by the employer.
N.B:- Circular No 8/2005 dated 29/08/2005 may also be referred to for some more details.

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