FBT ON BROADBAND

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This query is : Resolved

Pavithra (Querist)

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)

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)

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)

11 September 2007 In telephone bill, Internet charges will be separately given.

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

Pavithra

Pavithra (Querist)

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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