FBT Assessment

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varun gupta (Querist)
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20 May 2009 By what period an ITO can do the assessment of the Fring Benifit tax of an assessee?

Suppose a company deposited FBT lesser than by some amt due to wrong calculation and also filed wrong details while filing FBT return. Its now more than 2 yrs now. Can the ITO still call for books of A/cs and do assessment?

Will this time period of assessment also have impact upon Intt any due on assesse for delayed deposit of FBT two years back. Can he be called now to deposit Intt or not?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 May 2009 If the A.O. has reason to believe that any fringe benefits have escaped assessment he may issue notice u/s 115WH calling upon the assessee to furnish true and correct return of fringe benefits. The notice u/s 115WH(1) can be issued with in 6 years from the assessment year concerned. The A.O. will check the books and records and complete the assessment accordingly. Interest on delayed payment of FBT will also appear in the assessment order which the assessee is liable to pay.

varun gupta

varun gupta (Querist)
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21 May 2009 Thanks for the reply. But I have somewhere read that FBT assessment can be made only within 1 yr after the A.Y for which return relates. Pls correct me if I am wrong.

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Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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24 July 2024 Your understanding about the assessment time limit for Fringe Benefit Tax (FBT) appears to be slightly off. Here’s the correct perspective:

Under the Income Tax Act, assessments are typically made within a specified time frame to ensure timely compliance and rectification of any discrepancies. For FBT, which was applicable until its abolition in India from 1st April 2009, the assessment procedures were aligned with the general provisions of the Income Tax Act.

1. **Assessment Time Limit for FBT:**
- The assessment for FBT was governed by the provisions of Section 149 of the Income Tax Act, which pertains to the time limit for completion of assessments. According to this section, assessments under FBT could generally be completed within one year from the end of the financial year in which the FBT return was filed.

2. **Clarification on Assessment Period:**
- If a company filed an FBT return for a particular assessment year (A.Y.), the Income Tax Department typically had one year from the end of that A.Y. to complete the assessment. This means that assessments for FBT could be completed within a reasonable time frame to allow for processing of returns and verification of details provided.
- It’s important to note that this assessment period is a general guideline and may vary based on specific circumstances and notifications issued by the Income Tax Department.

3. **Abolition of FBT and Current Scenario:**
- Since FBT was abolished from 1st April 2009, these assessment time limits and procedures are no longer applicable. Therefore, any discussions about FBT assessments now pertain only to historical contexts and are not relevant for current tax compliance.

In summary, your understanding that FBT assessments needed to be completed within one year after the assessment year (A.Y.) for which the return relates is broadly correct under the previous FBT regime. However, with the abolition of FBT, these rules no longer apply, and current tax compliance focuses on other aspects of business taxation under the Income Tax Act. Always consult with a tax professional for the latest and accurate guidance on tax matters relevant to your situation.