CIRCULAR
FINANCE ACT, 2005 - FBT
Finance Act, 2005 - Explanatory Notes on the Provisions relating to Fringe Benefit Tax
CIRCULAR NO. 8/2005, DATED 29-8-2005
On some occasions, employers prefer to give a per diem allowance for meeting the expenditure on lodging and boarding rather than making payments on actual basis. The per diem allowance is exempt from tax under section 10(14). Would this be subject to FBT?
Since the per diem allowance is paid for the purposes of use of hotel, boarding and lodging facilities, it would fall within the scope of clause (G) of sub-section (2) of section 115WB. However, the employees will not be liable to pay income-tax on any surplus accruing to him from such allowance.
Does this apply when the per diem is paid only of boardig & lodgin facility. Can it be covered for boarding + loding + conveyance etc. Also from the above it seems that the employee doesn't have to submit any bills?
Is the interpretation correct? Please confirm.
CAclubindia
