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Fringe benefit tax - what if the receipts are in doubt

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Kumar

internal audit

21 Points Posted on 21 April 2009

The employer will reimburse the flexible benefits when the employees submitted the expense receipts (e.g. fuel). The employer will review the receipts and declare the FB amounts.

Will the employer be liable IF they have accepted and decalred receipts where its integrity is in doubt (i.e. they were bought from somebody by the employee)? What will be the tax implication to the employer and employee?

Thank you.

Replies (2)

Ashish M

Chartered Accountant

2103 Points Posted on 27 April 2009

Any such amount given by the employer to the employee would certainly be according to the agreement made at the time of joining..........if such agreement cotains any such clause where the employer could deny certain reciepts in case of doubt, then he can do so......

as far as tax effect is concerned.....if the amount is recived by employee, only then it will be taxable.............and accordingly for the employer too........