DDT- Query

first FBT can not be setoff from Income Tax TDS. it is a tax on Expenditure means on fringe benifits and it can not be set off from Taxes on income. u hv to pay FBT inspite of TDS refund.

similarly DDT can not be set off from IT TDS.u hv to make payment for that.

 Where in the act it said that FBT liability should not be set off with IT refund 

FBT is alltogather different.That is the reason why we dissallow FBT also in IT Return.So you cant set it off aginst IT Refund or vice versa.Coming back to the main que,the employer will have to pay Divi.Distri Tax and will get added Refund.

FBT Is an expenditure tax, how could it be set off agst Income tax, as many have already said there is no such provision in the ITR

Dear Santosh,

Situation for your client is

DDT Payable for Fy 2008-09 - Rs. 10.87 Lakhs

Income tax Refund for FY 2008-09 - Rs. 14.58 Lakhs

You want to know whether the DDT payable could be adjusted against Income Tax for the same year.

The Answer is no due to the following reasons:

- DDT and Income Tax are two different taxes under two different provisions of Income Tax Act. One is tax on Income and other is tax on distribution of Income.

- No explicit provision in IT act which allows such settlement.

-The Income Tax refund is not the final one and subject to assessment whereas DDT is final liability.

Due to the above reasons the proposed settlemet would not be possible.