Is it liable for Fringe Benefit Tax (FBT)??

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Neha (Querist)
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09 May 2008 If a company reimburses the conveyance of the candidates called for the interview, which are recorded under Recruitment Expenses, then is it liable for FBT????
Please send me your opinion or if anyone can forward me the relevant section from the income tax act for this particular query.
Thanks

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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09 May 2008 For FBT there should be employer and employee relationship. In this case this relationship does not exist, so in my opinion FBT is not attracted.

You can see section 115WA, which states that FBT will be charged on expenditure incurred by employer over employees.

Neha

Neha (Querist)
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09 May 2008 Agreed, But there are many exceptions also. N what if a candidate coming for interview is eventually selected(employed) then what is the treatment under FBT for the reimbursement of the conveyance.

Neha

Neha (Querist)
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12 May 2008 ok

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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13 May 2008 In my opinion, just by selecting in interview a person don't become employee. he will become the same when he will join the office officially and take charge of his duty.

Neha

Neha (Querist)
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14 May 2008 I got ur point. Thanks a lot!

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