FBT on employee transportation

The Finance Act,2006  has amended  section 115WB(3) with effect from assessment year 2007-08 to claify that:-

Free or subsidised transport  provided to employees for  journeys from their residence to the place of work or such place of work to the place of residence will  will not attract FBT irrespective of whether such facility is in lieu of transport allowance or not.

It is in lieu of conveyance/transportation allowance to employee, which is not liable for FBT. (Clarified in FAQ 104 of Circular No.8/2005 dt.29-08-2005)

Jayalakshmi and Jitendra goswami are absolutely right. Providing Transportation facility to employees from their place to the place of work and fro will NOT ATTRACT FBT in the hands of the company.

Hi

If Iam allowed to add to the above question, please clarify

If motor car is given exclusively for the employee, mainly for conveyance between home and office. The vehicle is hired from a cab operator and the company pays the operator based on the log book. The employee is also allowed to use the vehicle for his personal purpose during holidays(which is not on a regular basis).

Will this kind of an arrangement attract FBT for the whole amount charged by the operator including the charges relating to conveyance between home and office.

If yes - then whether maintaining a seperate log book and raising seperate bill, for employees private usage would help to bring down the FBT liability.

Thanks