FBT due on prepaid expenses or not ?

This query is : Resolved

Manoj (Querist)
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04 October 2007 If we pay Rs. 1 Lac for insurance of car, and we book Rs. 50K as expenses pertaining to current financial year & balance amount of Rs.50K we book as prepaid.

In above case, what will be FBT liability i.e. on Rs. 1 Lac or Rs. 50K, which we have booked as expense.

R.V.RAO

R.V.RAO (Expert)
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04 October 2007 THE CHARGING SECTION FOR FBT 115WA SAYS THE APPLICABILITY OF THE TAX IS ON SATISFYING THE FOLLOWING CONDITIONS:
1.FRINGE BENEFITS ARE PROVIDED BY EMPLOYER
2. THESE BENEFITS ARE PROVEIDED O THE EMPLOYEES.
3.THESE BENEFITS ARE PROVIDED DURING THE PREVIOUS YEAR.
THUS WHAT THE FBT TALKS IS ABOUT THE YEAR OF PROVIDING THE BENEFITS-BUT NOT WHEN THEY ARE ACCOUNTED.
FBT IS THUS PAYABLE IN THE PREVIOUS YEAR
IN WHICH THESE BENEFITS ARE PROVIDED .
R.V.RAO