Query regarding FBT.

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M.Sriram Shenoy (Querist)
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22 May 2008 Hello Experts. I have two queries .
1.It is said that FBT is applicable only on expenditures which are allowed by IT Act.If one particular expenditure, which attracts FBT has been disallowed on the grounds of non deduction of TDS, then what will be the tax implication with regard to FBT? If the assessee claims the abovesaid expenditure next year by duly remitting the respective TDS amount, will there be any chance of paying FBT on the same as FBT was not applicable last year due to disallowance?
2. If an employer pays the income tax of his employee, will this be regarded as a perquisite and taxed in the hands of the employee or will the employer be liable to pay FBT on this amount?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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22 May 2008 1)If there is a disallowance in the categories of subsections (1) or (2) of csection 115WB, where is the question of they being considered at all?
2)The tax on salary is not a perquisite is what a recently decided legal case says.