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Fringe Benefit Tax

CA Anand Bhardwaj (Employment) (31 Points)

11 April 2008

Whether Conveyance Allowance given to Employee forms part of Fringe Benefits taxable u/s 115WB??

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9 Replies

Garima (Student) (1107 Points)
Replied 11 April 2008

Conveyance forms part of FBT u/s 115WB @ 20%.

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suresh (M-F&A) (69 Points)
Replied 11 April 2008

If conveyance allowance given to employee is included in his/her salary, than it doesn't forms part of FBT. If not included than it will be taxable under FBT.

suman nvss y (article assitant) (147 Points)
Replied 11 April 2008

dear friend

it will atract fbt @ 20% if it will not form port of salary.

CA Anand Bhardwaj (Employment) (31 Points)
Replied 11 April 2008

Thank you Ms. Garima & Mr. Suresh,

Now, if you go through the suggested answers uploaded for Nov'07 exams, you will find that Conveyance Allowance (fixed) has been held taxable as Fringe Benefit. Though, a rough reading of the section clearly provides that Fixed conveyance allowance shall not be included as taxable Fringe Benefit.

Kindly advise.

Regards,

MEGHA MITTAL (CA FINAL STUDENT) (155 Points)
Replied 11 April 2008

yes u r right

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suresh (M-F&A) (69 Points)
Replied 11 April 2008

Dear Mr Anand,

As per my understanding IF Conveyance allow.paid as part of salary and included in salary of employee than definately it not cover under FBT bcoz there should not be double taxation that employer also pay FBT on it and employee also pay tax on it. But if employer show as expenses than it covers under fbt. So it should be taxable either in hands of emplyee by way of I.Tax or to Employer by way of FBT.there should not be double taxation.