Relocation Expenses attracts FBT

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hamsa lekha (Querist)
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26 November 2008 Whether relocaion expenses paid by the employer to employee to relocate from the place of residence or any other place to the place of office attracts FBT.
If, so under which caegory it attracts?

Mcgupta

Mcgupta (Expert)
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27 November 2008 It attracts FBT u/s 115WB(1) alternatively it can be taxed in employee hand.

hamsa lekha

hamsa lekha (Querist)
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27 November 2008 accordng to the provsons of Sec 10(14) of the act read with Rull 2BB, Any allowance (by whatever name called)granted to meet the cost of travel on tour or on transfer (ncluding any sum incurred paid in connecton with transfer, packing and transportation of personal effects on such transfer) is exempt to the extent of actual expendiure incurred for the said purpose.

Accordngly, the relocation expenses are exempt in the hands of employees.

so, is it attracts fbt u/s 115WB(1)?

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 November 2008 The relocation allowance referred in the query,if it is paid in connection with transfer of the employee,will come u/s 10 (14). In other cases section 115WB(1)(a) attracts. You are also requested to see question no 47 in circular no 8/2005 dated 29/08/2005.

hamsa lekha

hamsa lekha (Querist)
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27 November 2008 the relocation expenses mentioned in he above query will come u/s 10(14)(i)
question no 47 in crcular deals with the provsons u/s 10(14) sub clause (ii).

So, please clarfy whether attracs FBT or not?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 November 2008 OK. Now you say that the said relocation allowance comes under section 10 (14)(i).So exempted in the hands of employee. FBT provisions attract.