By virtue of the provision of clause (d) of sub-section (1)
section 115 WB, introduced by Finance Act, 2007, an employer is
liable to pay Fringe Benefit Tax on any consideration for employment
provided by way of any specified security or sweat equity shares
allotted or transferred, directly or indirectly, by such employer
free of cost or at concessional rate to his employees. The value of
the fringe benefit is determined as the fair market value of the
specified security or sweat equity share on the date on which the
option vests with the employee as reduced by the amount actually
paid, by or recovered from the employee in respect of such security
or shares. The fair market value for this purpose is to be
determined in accordance with the method prescribed by the Board.
Since the method for determination of the fair market value was yet
to be prescribed, the Central Board of Direct Taxes (CBDT) had
earlier extended the date of payment of first installment of Fringe
Benefit Tax, which was to be paid on or before June 15, 2007, in
respect of transfer or allotment of specified security or sweat
equity shares to its employees, to 15th of September, 2007 (the date
of second installment).
The Central Board of Direct Taxes (CBDT) is currently in the final
stage of finalizing the method for determination of the fair market
value. In the meantime, the extended first installment and the
second installment of advance tax in respect of fringe benefit tax
falls due on 15th of September. In the absence of a method for
determination of the fair market value, it will not be possible for
an employer to determine the value of these installments of advance
tax related to fringe benefit tax in respect of allotment or
transfer of specified security or sweat equity shares to its
employees.
In order to mitigate this hardship, the CBDT has decided that the
first installment of Fringe Benefit Tax, which was to be paid on or
before June 15, 2007, and the second installment of Fringe Benefit
Tax, which is to be paid on or before September 15, 2007, in respect
of transfer or allotment of specified security or sweat equity
shares to its employees, may be paid on or before the 15th of
December, 2007 (the date of third installment).
MINISTRY OF FINANCE NEW DELHI SEPTEMBER 12, 2007/BHADRAPADA 21, 1929
Due date of advance FBT extended
Last updated: 15 September 2007
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