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FBT on Transportation Allowance

Ramasubbu K (Sr.GM - Finance & Company Secreta) (685 Points)

01 December 2007

A company provides Transportation allowance to employees which is exempt under Section 10 to the extent of Rs.800 P.M. in the hands of the employee. Whether the Company has to pay FBT on the transportation allowance given to its employees?

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16 Replies

Ravikumar R C (final student) (77 Points)
Replied 01 December 2007

No, Company is not liable to pay FBT. The concept behind the FBT is to leavy the tax on benefit given by employer to his employees for which tax was not being paid by the employee or employer

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K V Subba Rao (Service) (2708 Points)
Replied 03 December 2007

Fixed Conveyance Allowance given to employees is NOT liable for FBT. Refer Para 224.4-8 of 30th ediition of the Singhania's Direct Taxes Ready Reckoner

(Guest)

No, on transportation allowances company is not required to pay FBT.Because it is specifically excluded.

manoj (Articled Student) (66 Points)
Replied 04 December 2007

Allowances are not taxable to the extent of Sec 10. However, they doesnot come under the purview of FBT.

Amit Sharma (article) (2677 Points)
Replied 27 December 2007

no not liable to pay under FBT.

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Surendra (CA) (133 Points)
Replied 27 December 2007

any income which is taxable under employee income is not liable to FBT.If anything has been paid as a perquisite,not taxable under employee income then it is liable to FBT. in ur case, trasportation allowance is not liable to FBT as it is falling in income of Employee

Hari Venkata Ramana (M.Com, AICWA) (124 Points)
Replied 19 April 2008

When some thing is chargeble in the hands of employee, it cannot be brought under Fringe Benefit Tax Though it is exempted in the hands of employee.

Trasportation allowance which is in fixed nature is exempted up to 800/- per month is not taxable as FBT.

However If you pay transportation to your employee for performing journey to outside on official duty, it is taxable as FBT.

(Guest)

Kindly intimate the extent upto which transport allowance should be given exemption for income tax calculation

(Guest)

Kindly intimate the extent upto which transport allowance should be given exemption for income tax calculation

Shudhanshu Agrawal (Business) (2570 Points)
Replied 05 December 2008

FBT is not applicable on Transport Allowance

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(Guest)

Kindly intimate the extent upto which transport allowance should be given exemption for income tax calculation

praveen (Chartered Accountant) (6971 Points)
Replied 05 December 2008

anything given more than 800 Rs. pm as transport allowance and any amount given more than Rs.15000 as medical allowance is taxable under FBT

(Guest)

Sir, Kindly confirm whether transport allowance is taxable or not if yes than upto what limit. my TA is Rs 3200 + percentage DA = Rs 3712 Pl clarify, how much TA is exempted from income tax. thanking you

Swaminathan (Chartered Accountant) (84 Points)
Replied 12 December 2008

Transport allowance of Rs. 800 pm is exempt from Tax. In case the employee owns the motor car and the same is being used for both private and official purpose then can claim Rs. 1200 pm+ 600 pm (driver salary) (for engine capacity less than 1.6 litre and Rs. 1,600pm + 600 pm for engine capacity more than 1.6 litre).