FBT - cash gifts to employees

This query is : Resolved

CA Sandhya S (Querist)
Follow

15 November 2008 Hi, I want to know if Cash gifts to employees is liable to FBT. If yes at what percent. And what about cash gifts given to women for maternity

Deepak Agrawal

Deepak Agrawal (Expert)
Follow

15 November 2008 Gifts whether cash or not and for any reason are liable to FBT at 50%

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
Follow

15 November 2008 All the gifts are liable to FBT whether given in cash or kind. The value of fringe benefits is 50% of the amount paid as gifts and that will be taxable @ 30%+EC+SEC.

Upgrade to CAclubindia Pro. Subscribe Now!

CA Sandhya S

CA Sandhya S (Querist)
Follow

15 November 2008 Thanks for the info.
However i received a mail with an attachment - 'Hand book on FBT'.
It was mentioned that - "Cash gifts to employees on appreciation of services granted does not attract F.B.T."

In case you need to see the file, will mail the handbook to you.

My mail Id is sandhya.sowmi@gmail.com.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
Follow

15 November 2008 Gift whether cash or kind is liable to FBT.Tax value shall be 50% of gift multipied with 33.99%.Cash gift to the employees For aprreciation of service also get FBT attracted .For appreciation of service employer paying bonus and Incentives. FBT will attract.

Ajith Kumar

Ajith Kumar (Expert)
Follow

15 November 2008 I think sandhya is correct, Cash gift is not subjected to FBT but it is taxed in the hands of the employee as profit in lieu of salary under section 17(3) of the Income Tax Act.