FBT accounting

FBT (Fringe Benefits tax is the tax paid by the employer for benefits provided to the employees). It is nothing but another tax, So its treatment is very much similar to the Income taxes treatment in the books of accounts.

Since we make provisions for income tax paid in the books of company, so also we need to make provision for FBT. In the Balance sheet it is shown as a libaility, and In the Profit/Loss account this is shown as:

Net profit for the year                                                      xxx

Less: Provision for:- Current tax (Income tax)                 xx

                                     Deferred tax                                xx

                                     Fringe Benefit tax                         x

If FBT is paid during the year it shoud be shown as FBT (advance tax).

Also extra FBT paid is eligible for refund. Cannot be carried forward.

Excess FBT is Not Eligible For Refund.

But it can be adjusted against Next Year Liability.

To be  carried forward or refund ???
what is final ?

To be  carried forward or refund ???
what is final ?

and Annie I dont understand that provision for FBT
shud be shown in balance sheet liability side or
in p&l  as u have shown ???

FBT  is refundable. it cannot be adjusted against next year amount. FBT amount can be shown under duties and taxes (if payable). if paid as advance tax then either it canbe transferred to p&l account and amount can be nullified (but the amount is disallowed for income tax purpose). if it is an partnership concern then amount can be transferred to partners capital account

Yes provision for tax is shown in balance sheet under the head provisions and if its a company u hav to follow the companies act schedule 6 that says that provision for current tax, deferred tax and FBT should be shown as reduction from profit for the year.

And excess FBT is refunded, it cannot be carried forward