22 May 2008
The Finance Act’ 2005 introduced the concept of Fringe Benefit Tax under the purview of the Income Tax Act’ 1961 from sections 115W to 115 WL.
Finance Act’ 2005 has adopted a bifacial approach for the taxation of fringe benefits:
Perquisites which can be directly attributed to the employees:
Such perks will continue to be taxed in the hands of the employees in accordance with the existing provisions of section 17(2) and subject to rule 2A, 2B and 2BB, which have been dealt in a detailed manner under the head perquisites of the salaries module.
Perquisites which cannot be directly attributed to the employee or where because of practical impossibilities it is not feasible to tax the benefits in the hands of the employee:
Where it is not possible to tax the benefits on account of non feasibility/ practical problems to tax benefits the Fringe Benefit Tax comes into picture. This tax has to be paid by the employer on the value of such benefits provided or deemed to have been provided to the employees.
STPI-software technology park od india sofware are developed & exported to otner contries
23 May 2008
FBT : tax rate is 30% but actually not whole amt of exp. is charged. for different exp. there is diff. percentage of amt to be charged. like only 5% of travelling exp. is chargeable making effective tax rate 30%*5% = 1.5%.
STPI : are notified offices of companies, which make and export softwares like infy and wipro. remember not all offices are notified for all cos. it is still possible that infy's mysore office may be notified while hyd. office is not. such notified offices get income tax exemption for certain years, because they earn foreign currency and produce huge employment.
CAclubindia
