Whether prepaid exp. are liable for FBT or not ?
8 Replies
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 26 August 2008
The liability to FBT will be on the basis of what you have to charge to P & L
amitparikh.
(acountant)
(22 Points)
Replied 27 August 2008
| Originally posted by :Ashish Kumar Bansal | ||
| " | Whether prepaid exp. are liable for FBT or not ? | " |
Sunali
(Learner)
(1317 Points)
Replied 02 September 2008
Agree with Shyam..
As per Circular No. 8/2005, dated August 29, 2005, FBT would be payable in the year in which the expenses are incurred. Therefore, FBT would not be payable on payment of advance towards expenses to be incurred in the future.
Hence FBT is not payable on prepaid expenses..
Sunali
(Learner)
(1317 Points)
Replied 04 September 2008
Hey guys...reviewing the same point again...
if FBT is not payable on prepaid expenses...the column 'ACCOUNTED FOR IN THE BALANCE SHEET' is for what figures..?
Please clarify as i have observed in usual practice FBT is being paid on prepaid expenses also i.e. on payment basis...
NIKUNJ RATHI
(C.A)
(56 Points)
Replied 07 September 2008
Sunali,
FBT is paid on the expenditure charged to P& L account and not on prepaid expenses.
I would like to clarify your point regarding payment of FBT on payment basis:-
Those assessees who follows the cash basis of accounting are required to pay FBT on expenditure on payment basis.
Nikunj Rathi
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