30 November 2009
Fringe Benefit Tax was introduced in 2005 to be charged on the value of certain benefits offered by employers to their employees.
However, it turned out that the amount of tax collected by the government was not enough and the pain caused to corporates by way of compliance and paperwork was enormous. Under the 2009-10 Budget, FBT has been abolished.
Announcing the decision of the government to do away with FBT, Finance Minister Pranab Mukherjee [ Images ] said in his Budget speech that "this tax has been perceived as imposing considerable compliance burden. Empathising with these sentiments, I propose to abolish the fringe benefit tax."
While the abolition of FBT is going to be received very favourably by the finance departments at companies, the impact on your personal finances might not be the most optimal for you.
The removal of the FBT means that perquisites will be taxed in the hands of employees at the marginal rate of tax applicable to them...we will have to await the valuation rules applicable to perquisites.
30 November 2009
Dear Hakeem FBT is the tax which is imposed on the employers who are provinding the benefits to thier employees. The rate of tax will be applicable on the basis of the type of benefits provided to them by the Employer.
CAclubindia
