fbt on motor car

Others 1402 views 16 replies

ok tell me if motor car is used by the partners,will there be FBt as they are not employees?

Replies (16)

Benefit is deemed to have been provided to the employees (which is very difficult to digest)

If u claim expenses in the business then it is definately liable to FBT

but this is for the partners who are the owners then how it can be liable for fbt?

Like I said earlier, the IT law provides that though the expenditure is incurred in the normal course of business (including for partners) such notified expenses are deemed to have been provided to employees.  The law presumes that tax has to be paid on notified expenses even if they are not incurred for/by employees.

In short Government need revenue which they are collecting in this form.  It is disgusting to believe that such a levy is sustaining and is not being challenged/quashed in/by any of the Courts.

ya i agree

but if there is no employee in firm then there will b no f.b.t

The Value of Fringe benefits in respect of motor car is computed @ 20% of the total expenditure. Since the expenditure debitted to P/L may include exp incurred w.r.t. non employees also, law presumes that 20% of the entire exp has been incurred w.r.t employees and accordingly, only 20% is deemed as value liable for FBT.

In my opinion, there is no flaw in this provision and the FBT provisions has been beautifully drafted so that a assessee need not sit and segregate as to which expenses are liable to FBT and which are not. This will reduce the chance of evasion also. 

thanks for the information

Yes in deed it is drafted beautifully and therefore political parties are excluded from the purview of FBT

FBT has to be paid by the firm no matter who the user is. It includes even depreciation taken on the car and its fuel and maintenance.

FBT will be applicable as it is based on total expenses. They have not made seperate provision for this. If there is one employee FBT will come intom picture.

Hai friend, my solution is as below

 

If the Car is owned by the Business, and used by the Partners for personal purpose as well as for Business, then the Proportionate amount for personal purpose have to be diss allowed and remaining portion of business Expense is only liable for FBT, the other portion have to be add back to the Net profit of the business in computing the taxable income of the bussines

 

This will come under Deemed Benefit & hence liable for FBT.

This will come under Deemed Benefit & hence liable for FBT.


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