11 July 2009
It is common knowledge that the FBT has been abolished Starting 1st APR 2010. But a specific clause has also been added to 17(2 ) saying Fringe benefits shall be taxed as perquisites hereinafter. In a nutshell, 115WB(1)(D) says that all sales promotion activity will be liable to FBT. Expenditure on festival celebrations happening in an organisation was liable to FBT earlier. Now, should an employee pay tax for something like a festival celebration happening in an organistaion, which is not organised/planned by him? The funnier aspect of this, is the fact that the same expenditure becomes deductible from the revenue earned and only the remaining is taxable. I understand a clarification on the above points is due to come, but don't you think, in a budget, the Finance Minister must have reasonable homework before spelling out anything. This, in my opinion is shoddy crazy work! Atleast a notification to clarify the same must have been issued.
11 July 2009
Yes. FBT abolished from Financial Year 2009-2010. And what the FM meant by that fringe benfits shall be taxable to employees is meant that fringe benefits which can be directly attributable to employee as Fringe benefit shall be taxable in his hands as the situations were eralier when FBT was not in existence. Definitely, it shall not cover all expenses as were covered in FBT. But I dont think anything funnier in this. All the provisions can never be given in budget. Budget only contains changes in provisions. Rules shall be framed accodingly soon and brought for the general public. So instead of making any comments like this, we should wait and watch.
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