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Fringe benefit tax

FATEMA (CHARTERED ACCOUNTANT) (719 Points)

07 September 2010

My client has paid FBT in the 1st quarter of this financial year inspite of FBT being abolished.Are we suppose to claim the refund of FBT or are we suppose to treat it as advance income tax?

Regards,

Fatema

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7 Replies

Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
Replied 07 September 2010

You can claim as adevance Tax.

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CA Shiv (Business Controller) (2987 Points)
Replied 07 September 2010

I will advice to claim the refund...

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 07 September 2010

CIRCULAR NO. 2/2010.

Dated 29/01/2010

F. N0.385/05/2010-IT (B)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Sub: Adjustment of “Advance Tax in respect of Fringe Benefits” for
Assessment Year 2010-11 against “Advance Tax” – matter regarding.

The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT) on the value of certain fringe benefits as contained in Chapter XII H (Sections 115 W to 115 WL) of Income Tax Act, 1961. By the Finance (No. 2) Act, 2009 a new Section 115 WM was inserted to abolish the FBT with effect from Assessment Year (A.Y.) 2010-11. Consequently, benefits given to employees are taxed as perquisites in the hands of employees in terms of amendments to Clause 2 of Section 17 of Income Tax Act, 1961. However, during the current Financial Year 2009-10 some assessees have paid “advance tax in respect of fringe benefits” for Assessment Year 2010-11. In such cases the Board has decided that any installment of “advance tax paid in respect of fringe benefits” for A.Y. 2010-11 shall be treated as Advance Tax paid by assessee concerned for A.Y. 2010-11. The assessee can adjust such sum against its advance tax obligation in respect of income for A.Y. 2010-11 or in case of loss etc claim such payment as refund as advance tax paid in A.Y. 2010-11.