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exps.on free tickets for employees' family member

abid (accountant) (169 Points)

22 November 2007

hi,

gentlemen can u clerifie me if a software co. provide free tickets to the employees' including Directors and there families whether it will be allowed as expenditure in P/L a/c if yes then it will attract FBT what will be the rate chargable to tax.

becaus u/s 115WB-(b) ----on any free or concessional tickets provided by the employer for private journeys of the employees and there family members will attract FBT and if it attract FBT then it must be an allowed expenditure.

Thanks & regards

Abid hussain

accountant

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3 Replies

(Guest)

Hi abid According to section 115WB (b) any free or concessional tickets provided by the employer for private journeys of the employees and there family members will be covered under FBT and the rate will be 20%

Jagrut Shah (Chartered Accountant) (80 Points)
Replied 22 November 2007

Hi Aibd, I want to clarify this issue in following two ways. 1) If the free or concessinal ticket to employees (including directors) and his family members was given under the company policy then it is allowable expenditure in P&L. And it attracts the FBT on total amount of expenditure reimburse by company to employee for ticket. For FBT purpose the value should be taken 20% of the amt. of exps. and on that 30% tax is charged (cess and surcharge is also applicable). 2) If free or concessinal ticket is not as per company policy for family members and still company reimburse the exps. then the exps. on employee (incuding director) is allowed under P&L and exps. on family members is not allowed in P&L. So, FBT will be charged as above only on the exps. of emplyee and not on family members exps. I think this clarification may resolve ur query. Still if u have any doubt regarding this u may ask again. Regards, Jagrut Shah

(Guest)

Thanks Mr.jagrut Actually the exps. of tour in which the child was on tour paid off by the client on behalf of the co. and thereafter the co. paid off the amount to the client he made . And there is no written document for the policy because this is the first time . Thanks and Regard Abid Husain