Hi..Kindly clarify whether the recently abolished FBT can include TA and HRA and thus the same may be excluded from calculating Income Tax on salaries? This is in respect of the salaries being distributed to employees which includes all the usual components, viz. Basic, DA, HRA, TA, Sp. Allow., etc.
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Whether the FBT can include HRA and TA?
Replies (2)
1) HRA and TA come within the definition of Salary and hence are included in Income from Salaries.
2) FBT was introduced to tax benifits received by the employees which are not included in salaries but are claimed as expenses by the company under various different heads (like telephone, travel, Entertainment, gifts etc)
3) Since HRA and TA are forming part of "Salaries" and are being taxed under "Income from Salaries" they will not be again taxed under FBT regime.
4) The employee gets benefit of exemption in respect of HRA and TA subject to terms mentioned in section 10
Hope this clarifies your question..
Yes, CA Jayesh has explain very nicely
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