priyanka (manager) (109 Points)
04 June 2008
Priyanka Kala
(Student CA & CS)
(1397 Points)
Replied 04 June 2008
Can u explain me this act in details...??
deepak thukral
(consultancy)
(45 Points)
Replied 04 June 2008
ONE THING IS CLEAR THAT THE COMPANY IS AVAILING DISCOUNT FROM THE VENDERS AND DISTRIBUTING THE SAME TO ITS EMPLOYEES IN THE FORM OF MITHAI. HAD IT NOT DISBURSED TO ITS EMPLOYEES, THE SAME SHOULD HAVE GONE TO THE PROFIT AND LOSS ACCOUNT OF THE COMPANY. THUS IT IS DISTRIBUTED OUT OF THE PROFITS BY VIRTUE OF EMPLOYER-EMPLOYEE RELATIONS IN THE FORM OF MITHAI WHICH IS SUFFICIENT TO BRING IT IN THE AMBIT OF FBT. THUS THE COMPANY IS LIABLE FOR FBT AS THE SAME IS NOT INCLUDED IN FORM 16
priyanka
(manager)
(109 Points)
Replied 06 June 2008
Gurdip Sir,
Please let me know under which criteria it will be taxable.
Nitesh Jain
(CA Final Student & Manager(Accounts & Taxation))
(91 Points)
Replied 06 June 2008
Priyanka ji,
You are saying that it is to be distributed to its employees. But I want to know, what is the actual position. Is it actually distributed or not?
Please clarify.
priyanka
(manager)
(109 Points)
Replied 06 June 2008
yes it is paid in cash to employees by closing mithai account...
Nitesh Jain
(CA Final Student & Manager(Accounts & Taxation))
(91 Points)
Replied 07 June 2008
Then it is chargeable to FBT under Entertainment Expenses.