Fringe Benefit Tax

This query is : Resolved

Sunali (Querist)
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05 September 2008 As per Circular No. 8/2005, dated August 29, 2005, FBT would be payable in the year in which the expenses are incurred. Therefore, FBT would not be payable on payment of advance towards expenses to be incurred in the future.

Hence FBT is not payable on prepaid expenses..

reviewing the same point again...

if FBT is not payable on prepaid expenses...the column 'ACCOUNTED FOR IN THE BALANCE SHEET' in the FBT Form is for what figures..?

Please clarify as i have observed in usual practice FBT is being paid on prepaid expenses also i.e. on payment basis...

Jitender

Jitender (Expert)
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05 September 2008 it refeered to the exp capitalized.
becz fbt is not payable on when dep is charged on them .
for e.g exp on travelling capitalized.

Sunali

Sunali (Querist)
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06 September 2008 sorry sir, but if can elaborate a bit more...as if it refers to the expenses capitalized then why do we add it to the exp. accounted in P&L A/c n then take the total for the calculation of FBT..???( as U said FBT is not Payable on that)

Jitender

Jitender (Expert)
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07 September 2008 if any exp which is chargeable to fbt is capitalized then it appears in balance sheet rather than in p& l a/c .
therefore there is a column as u have mentioned.
& when we claim dep on such amt capitalized then we need not to pay fbt again.

Sunali

Sunali (Querist)
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08 September 2008 So we can conclude that FBT is payable on capital as well as revenue expenditure but not on the prepaid ones i.e. the advance twrds expenses to be incurred in future.

Thx..

Jitender

Jitender (Expert)
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08 September 2008 welcome.

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