FBT ON BROADBAND

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Pavithra (Querist)
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09 September 2007 The employee is reimbursed his residential telephone bill by his company. The telephone is a broadband connection.

Whether the company is liable for FBT?

CA Mani

CA Mani (Expert)
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10 September 2007 Even though Internet is provided thru telephone, Telephone charges paid will be taken under Telephone charges category to charge FBT - Sec.115WB(2)(J).

Seggregate the bill into Telephone charges and Internet charges.

Telephone charges - Charge FBT @ 33.66% on 20% of such exp's.

In case not possible to seggregate - Tax on entire amount.

Raj

Raj (Expert)
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10 September 2007 Yes it is liable to FBT . It is tough to seggregate to bills while FBT is chargable on presumptive basis . If you have decisive evidence of bills which is used for internet exclusively then you may get relief.

CA Mani

CA Mani (Expert)
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11 September 2007 In telephone bill, Internet charges will be separately given.

So, It's possible to seggregate in almost cases.

Pavithra

Pavithra (Querist)
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14 September 2007 Thanks for the clarification. In case of segregation of the bill, would internet charges be taxable as perquiste in the employee's hands.

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