For skipping the tax in the hands of the employees salary has been bifurcated into BASIC, Travelling Allowance, Medical Reimbursement, Uniform allowance, Professional Allowance, Lunch Allowance & Other Allowances.
Travelling Allowance & Luch Allowance are exempt in the hands of the employee from payment of tax & in the hands of the employer from paying FBT
My question is if the employer provides transport facility to pick & drop the employees from there residence to office free of charge is it liable for FBT as we have already providing them Travelling allowance
Further, if any food is provided during the office hours to the employees shall it be liable to FBT as we are allowing lunch allowance to them as a part of salary
04 July 2009
NO Both the transaction will not attract the FBT as both are specifically expemt from FBT in the FBT provisions. An another near similar payment which is covered FBT can not take away the specifically provided expemption.
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