FBT PROVISION ON CONVEYANCE

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DHARMCHAND OSTWAL (Querist)
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15 December 2010 WE HAVE FILED E RETUEN FOR SOFTWAE DEV.CO.FOR fy 2008-09 INWHICH WE HAVE PAID FBT ON CONVEYANCE EXP @ 5% BUT WHEN WE RECEIVED INTIMATION FROM BANGLORE THEY DEMANDED FBT TAX ? WE CALCULATE THE FIGURES THEN WE FIND THAT THE IT DEPTT, CALCULATED THE FBT @ 20%. NOW WHAT PROCEDURE SHOULD BE ADOPTED TO RACTIFICATION OF SUCH MISTAKE.

HUZAIFA HUSSAIN

HUZAIFA HUSSAIN (Expert)
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15 December 2010 Since u are in receipt of intimation u/s 143(1) of income tax act, this itself is rectification. Now simply make the payment of difference of FBT through challan or online.

DHARMCHAND OSTWAL

DHARMCHAND OSTWAL (Querist)
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15 December 2010 80. Where the business consists partly of software development and partly of manufacture of say, FMCG products, whether the benefit of valuation at a lower rate of 5% instead of 20% of conveyance and travel expenditure for charge of FBT be available, and if yes, on what quantum?

FBT is a tax qua employer. Therefore, the expenditure of the nature referred to in clauses (A) to (P) of sub-section (2) of section 115WB is to be taken into account with reference to nature of the business.

Accordingly, the expenditure relatable to the business of manufacture or production of comp uter software would alone qualify for lower rate for valuation of fringe benefits relating to expenses referred to in item (F) and (G) of sub-section (2) of section 115WB. Expenditure relating to manufacture of FMCG products would be liable to FBT in accordance with sub-section (1) of section 115WC of the Income-tax Act.

Ihave read the above provision of FBT, if the rate is 5% applicable and in intimation rate is calculated on conveyance @20% ,, what procedure to adopt to cancel the demand in intimation.

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HUZAIFA HUSSAIN

HUZAIFA HUSSAIN (Expert)
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15 December 2010 U R REQUIRED TO FILE RECTIFICATION PETITION U/S 154 OF THE INCOME TAX ACT FOR RECTIFICATION OF ORDER, IF THE MISTAKE IS APPARANT FROM THE RECORD WHILE PASSING THE ORDER.
U SHOULD GIVE EXPLAINATION SHOWING HOW U HAVE TAKEN ONLY 5% RATE INSTEAD OF 20%.

BECAUSE RECTIFICATION PETITION U/S 154 ONLY NEEDS TO BE FILED IF U FOUND ANY MISTAKE WHICH IS APPARANT FROM THE RECORD WHILE PASSING ORDER. AND IF THE MISTAKE IS NOT APPARANT FROM THE RECORD THAN FILE APPEAL AGAINST THE ORDER.