06 August 2008
A specific section of Inome tax act excluded co-operative societies(bank) from the surcharge on income tax. But in case of FBT co-opertive societies are not seperatly defined in Finance Act 2008.
Surcharge on FBT is governed by the 4th proviso of section 2(3) of the Finance Act, 2008 that reads as follows:
"Provided also that in respect of any fringe benefits chargeable to tax under section 115WA of the Income-tax Act, income-tax computed under this sub-section shall be increased by a surcharge, for purposes of the Union, calculated,— (a) in the case of every association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent of income-tax where the fringe benefits exceed ten lakh rupees;
(b) in the case of every firm, artificial juridical person referred to in sub-clause (v) of clause (a) of section 115W of the Income-tax Act, and domestic company, at the rate of ten per cent of such income-tax;
(c) in the case of every company, other than a domestic company, at the rate of two and one-half per cent of such income-tax."
If we refer some books on FBT and Income tax and some programmes calculating income tax/FBT liability they indicates no surcharge on FBT for Co-operative banks. But if we read the above extract of Finance Act its plain menaning is as Co-operative societies (Banks) are assessed as Artificial Judidcial Person they are chargeable to surcharge of 10% on FBT.
I am working in a co-opertiave bank. One assessment of the Asst year 2006-07 is already comleleted and AO had not charged any surcharge on FBT.
PLease clarify wether surcharge on FBT is capplicable to Co-operative banks or not. Waiting for reply.
06 August 2008
in some sites given that if your net profit is below one corors then no surcharge is applicable you will log on www.indiataxes.com for this qury
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