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FBT applicable???

Piyush Jain (CA) (283 Points)

26 June 2009

if a concern is covered under presumptive tax, will FBT apply.

Let say, if he is assessed under 44AE, then will he be covered under the ambit of FBT.

Provide section and notification in support of you response.

Regards

Piyush

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(Guest)

115WA (1) In addition to the income-tax charged under this Act, there shall be charged for every assessment year commencing on or after the 1st day of April, 2006, additional income-tax (in this Act referred to as fringe benefit tax) in respect of the fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year at the rate of thirty per cent on the value of such fringe benefits.

(2) Notwithstanding that no income-tax is payable by an employer on his total income computed in accordance with the provisions of this Act, the tax on fringe benefits shall be payable by such employer.

So FBT have to be paid even if the Employer is assessed under presumptive taxation.

Have a nice day!!

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MAHENDRA KUMAR BAGRECHA (FCA) (1402 Points)
Replied 26 June 2009

I agree with the view of Tinku

RAMANJU (here to updating the knowledge) (485 Points)
Replied 26 June 2009

Mr. Tinku is absolutely right.

chaitanya cherukuri (Articled Student) (241 Points)
Replied 27 June 2009

u/s 115w Irrespective of wether a Person Is liable to pay Tax Or not under any section of the income tax, every person other than individual, hindu undivided family, political party , government company (Both central and state) and institution registered u/s 12AA or exempt u/s10(23C) is liable to pay fringe benefit tax if the employer as defined U/S 115w has provided any fringe benefit as defined U/S 115wc to any employee working in his organisation.

So it can be said that we need look at wether the said person is covered by defintion of employer defined U/s 115w to decide wether that person is subject to fringe benefit tax or not .

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 27 June 2009

First of all make the distinction between Income Tax and FBT. Income tax is Tax on income and FBT is Tax on expenditure.

Even in case of presumptive taxation, the FBT will be levied separately and not included in the income tax.

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Piyush Jain (CA) (283 Points)
Replied 27 June 2009

Thanks all for ur reply. I also made a research on the same. You guys are forgetting a pratical approach on the same. In this case i am not claiming any specific expense and therefore on what to pay FBT. You all are correct in posting that they are well within the ambit of FBT. So AO will be limited to FBT on depreciation and no other expense as they are not legally visiable to income tax authority. Regards Piyush