FBT IS APPLICALBEL OR NOT
This query is : Resolved
PRAVIN KOKAM
(Querist)
26 June 2009
IS FBT APPLICABLE ON THE PAYMENT OF HEALTH INSURANCE MEDICAL POLICY (STAFF)
taxindiaconnect
(Expert)
26 June 2009
As per section 115WB(2)E the definition of employee welfare is given as following -
(E) employees' welfare.
15[Explanation:- For the purposes of this clause, any expenditure incurred or payment made to-
(i) fulfil any statutory obligation; or
(ii) mitigate occupational hazards; or
(iii) provide first aid facilities in the hospital or dispensary run by the employer; or
(iv) provide creche facility for the children of the employee; or
(v) sponsor a sportsman, being an employee; or
(vi) organise sports events for employees,
shall not be considered as expenditure for employees' welfare;]15
From a careful perusal of the above it is clear that this is a exclusive definition where certain activities which are not intended to be covered under employee welfare has been exclusively provided for. Thus except the above everything is covered under employee welfare. Taking insurance on the health of the employee is a staff welfare measure, thus liable to FBT.
(E) employees' welfare.
15[Explanation:- For the purposes of this clause, any expenditure incurred or payment made to-
(i) fulfil any statutory obligation; or
(ii) mitigate occupational hazards; or
(iii) provide first aid facilities in the hospital or dispensary run by the employer; or
(iv) provide creche facility for the children of the employee; or
(v) sponsor a sportsman, being an employee; or
(vi) organise sports events for employees,
shall not be considered as expenditure for employees' welfare;]15
From a careful perusal of the above it is clear that this is a exclusive definition where certain activities which are not intended to be covered under employee welfare has been exclusively provided for. Thus except the above everything is covered under employee welfare. Taking insurance on the health of the employee is a staff welfare measure, thus liable to FBT.
CA Nitin Wadhwani
(Expert)
26 June 2009
In my opinion, it is not liable to FBT via a CBDT Circular.
26 June 2009
not liable for FBT
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