Clarification in FBT

FBT is applicable irrespective of the fact that the entity enjoys any tyoe of exemption under Income Tax Act or any other applicable law.

But, FBT is applicable only in respect of those expenses which are subject to deduction under the Income Tax Act. If the firm is subject to tax on presumptive income, according to me, FBT shall not be applicable in such case as the income is calculated on presumptive basis irrespective of the fact whether expenses are incurred or not to justify such income.

 

 

FBT treatment will be normal as we do for other companies

Dear Sir,

If any gift is given to a company's guest or to company's associates, then FBT will be leviable on such expenditure?

Pls let me know as soon as possible as i m facing some contradictions in the audit of a company.

Thanxs

Dear Sir,

Pls let me know whether the expenses incurred for the maintenance of garden in the premises of company can be included in the employee's welfare expenses?

On such expenses FBT is leviable or not?

Pls let me know as soon as possible.

Thanxs

u/s.115WB(2)(o), Gifts include the following:

Gift in kind; cash

Gift to customers, employees; to any other person.

So gifts to company's guests or associates attract FBT who come under other persons category. The qualifying amount shall be 50% of the amount incurred.

 

 

According to me, there is nothing connection in maintaining garden with employees welfare. It comes purely under office maintenance or something general maintenance like that. . So there should be no FBT on such expenditure. 

Originally posted by :Vijay Sarathi H
"	u/s.115WB(2)(o), Gifts include the following: Gift in kind; Gift to customers, employees( but gift given in cash is taxable in the hand of employees as salary in lieu of profit , employer is not liable for FBT) ; to any other person. So gifts to company's guests or associates attract FBT who come under other persons category. The qualifying amount shall be 50% of the amount incurred.	"

 

Originally posted by :Vijay Sarathi H
"	u/s.115WB(2)(o), Gifts include the following: Gift in kind; cash Gift to customers, employees( but gift given in cash is taxable in the hand of employees as salary in lieu of profit , employer is not liable for FBT); to any other person. So gifts to company's guests or associates attract FBT who come under other persons category. The qualifying amount shall be 50% of the amount incurred.	"

 

It is immaterial whether the company is paying tax under normal provisions or under the presumptive basis, provisions of FBT will be applicable as it does for all the cases.

Again, in the cases where states have given exemption from TAx, but those states have not given exemption on FBT, so FBT will be applicable.

 

Gifts to any other person attracts FBT. Garden maintenance will be covered by the provisions of Employee welfare if it is located in the employee colonies maintained by the employer.

Is this argument valid? Clarifications sought Though Reimbursement for Periodicals and Journals is a a FBT component, if we have it as a ‘Fixed’ component then I do not think it comes as a FBT component (say we can have it as fixed Rs. 1250/- per month) 2. Same in case of car maintenance, if it is a fixed allowance (with max limit of Rs. 84,000/- pa) it does not attract FBT 3. Telephone expenses, again if it is a fixed amount (with max limit of Rs. 36,000 PM), does not attract FBT

Fixed Component as suggested by you should be the fixed allowances given to the employees which is taxable in the hands of the employees. Anything which is taxable in the hands of employees is not covered under the purview of FBT. This is so to avoid double taxation.