Query regarding FBT

Hi, In terms of the provisions of clause (K) of sub-section (2) of section 115WB, FBT is payable on expenditure incurred for the purposes of maintenance of any accommodation in the nature of guest house other than accommodation used for training purposes. Therefore, expenditure on all guest houses is liable to FBT irrespective of whether they are used as holiday homes or not.

In terms of the provisions of clause (K) of sub-section (2) of section 115WB, any expenditure incurred for the purposes of maintaining any accommodation in the nature of guesthouse other than accommodation used for training purposes is liable to FBT. Since the expenditure on provision of food at the guest house maintained by the employer, contract charges paid to guest house staff and rent paid or payable in respect of the guest house building, are all for the purposes of maintenance of the guest house, such expenses are liable to FBT. Also depreceiation amount not liable to FBT.

Dear Anoop. Dont worry, In respect of guest house maintenance; assets purchased for guest house including depreciation thereon and rent of guest house are EXCLUDED from the purview of FBT.

Other maintenance expenses will attract FBT. And by the way, "STRANGERS" in this context doesnot literally mean unknown people, it means non-employees of the company who may have come to carry out an assigned work on contract or other basis upon the company's notice.

Dear sir,

Can you please tell whether FBT is payable on Guest House Rent.

Regards

Originally posted by :M.Sriram Shenoy
"	Dear Anoop. Dont worry, In respect of guest house maintenance; assets purchased for guest house including depreciation thereon and rent of guest house are EXCLUDED from the purview of FBT. Other maintenance expenses will attract FBT. And by the way, "STRANGERS" in this context doesnot literally mean unknown people, it means non-employees of the company who may have come to carry out an assigned work on contract or other basis upon the company's notice.	"

 

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