1 FRINGE BENEFIT TAX FRINGE BENEFIT TAX

August 19, Introduction to Fringe Benefit Tax..!!!!

August 19,  The FBT is payable by an Employer.  The Employer is liable only if he has an Employee.  Employer is liable only if he has provided Fringe Benefit and/or is deemed to have provided Fringe Benefit to his employees.  FBT is payable at the Rate of 30% (plus applicable Surcharge plus Education Cess) of the Value of Fringe Benefit Provided.  FBT is payable irrespective of whether “Employer” is liable to pay Income-Tax on his total income or not.  The FBT is payable by an Employer.  The Employer is liable only if he has an Employee.  Employer is liable only if he has provided Fringe Benefit and/or is deemed to have provided Fringe Benefit to his employees.  FBT is payable at the Rate of 30% (plus applicable Surcharge plus Education Cess) of the Value of Fringe Benefit Provided.  FBT is payable irrespective of whether “Employer” is liable to pay Income-Tax on his total income or not. Requirement For Fringe Benefit Tax U/S-115WA

August 19, Employer Includes:  Company.  Firm.  Association of persons or a Body of individual.  A local authority  Every artificial Juridical Person. Employer Includes:  Company.  Firm.  Association of persons or a Body of individual.  A local authority  Every artificial Juridical Person. Employer Excludes:  Individual & HUF.  Fund/Trust/Institution eligible for Exemption u/s-10(23).  Fund/Trust/Institutions registered u/s-12AA  A Political Party registered u/s 29A Definition Of Employer U/S-115W(a) Definition Of Employer U/S-115W(a)

August 19,  30% on the Value of Fringe Benefit- u/s-115WC Add:- Surcharge: Rates  For AOP/BOI: If FB does not exceeds Nil If FB exceeds %  Artificial.J.Person,Domestic Co.,Firm10%  Non-Domestic Co.2.5%  Local AuthorityNil Add:- Education Cess: 2% on [Tax+Surcharge]  30% on the Value of Fringe Benefit- u/s-115WC Add:- Surcharge: Rates  For AOP/BOI: If FB does not exceeds Nil If FB exceeds %  Artificial.J.Person,Domestic Co.,Firm10%  Non-Domestic Co.2.5%  Local AuthorityNil Add:- Education Cess: 2% on [Tax+Surcharge] Computation of Fringe Benefit Tax Liability & Rates.

August 19,  Covered u/s-115WB(1)  Any Privilege, Service, Facility or Amenity Whether provided Directly or Indirectly, or whether by way of reimbursement to Employee..  Any Free or Concessional Ticket provided by the employer for private Journeys of the employee’s or his family.  Expenses spent towards contribution in Superannuation Fund.. Which is exempted upto the limit of  Covered u/s-115WB(1)  Any Privilege, Service, Facility or Amenity Whether provided Directly or Indirectly, or whether by way of reimbursement to Employee..  Any Free or Concessional Ticket provided by the employer for private Journeys of the employee’s or his family.  Expenses spent towards contribution in Superannuation Fund.. Which is exempted upto the limit of Fringe Benefit Expenses..!!!

August 19,  Entertainment.  Provision of Hospitality.  Conference.  Sales Promotion & Publicity.  Employee’s Welfare.  Conveyance.  Use of Hotel,Boarding,Lodging Facilities.  Repairs,Running,Maintenance of Motor Car & the amount of Depreciation thereon(including Fuel)  Entertainment.  Provision of Hospitality.  Conference.  Sales Promotion & Publicity.  Employee’s Welfare.  Conveyance.  Use of Hotel,Boarding,Lodging Facilities.  Repairs,Running,Maintenance of Motor Car & the amount of Depreciation thereon(including Fuel)  Repairs,Running,Maintenance of Aircrafts & the amount of Depreciation thereon(including Fuel).  Telephones (including Mobiles)  Guest House.  Festival Celebrations.  Health Club.  Other Club Facilities.  Gifts.  Scholarships  Tour & Travels (including Foreign travels) Deemed Fringe Benefit..!!! Covered u/s-115WB(2)

August 19, Includes:  Exp in-connection with exhibition, performance,amusement,gam e or sports.  Reimbursement of expenses.  Exp on non-festive occasions.  Purchase of ticket for charity Shows,sports event.  Exp on Firecracker on Annual day. Includes:  Exp in-connection with exhibition, performance,amusement,gam e or sports.  Reimbursement of expenses.  Exp on non-festive occasions.  Purchase of ticket for charity Shows,sports event.  Exp on Firecracker on Annual day. Excludes:  Exp on festive-occasion. “Entertainment” u/s-115WB(2)(A) Rate-20%

August 19, Includes:  Food & Beverages  After office hours.  In-house training.  other than employees with in office.  In hotel business-drinks to customer as welcome drink.  Training center-(temporary) Includes:  Food & Beverages  After office hours.  In-house training.  other than employees with in office.  In hotel business-drinks to customer as welcome drink.  Training center-(temporary) Excludes:  To employees with in office or factory.  Paid vouchers  Training center – (permanent) “Provision for Hospitality” u/s- 115WB(2)(B) Rate-20%

August 19, Includes:  Conveyance,tour,travel on hotel or boarding & lodging in connection to a conference.  Programs organized by Trade bodies or institutions.  Complementary exp to participation fee.  Conference for agent & dealers. Includes:  Conveyance,tour,travel on hotel or boarding & lodging in connection to a conference.  Programs organized by Trade bodies or institutions.  Complementary exp to participation fee.  Conference for agent & dealers. Excludes:  Fee’s for participation by em’ee in any conference. “Conference” u/s-115WB(2)(C) Rate-20%

August 19, Includes:  If research done by own self for market or product.  Free offers,free samples of products,exp on artwork or royalty.  Winning trips by customer or client (travel+lodging+boarding)  Distribution of free trade samples. Includes:  If research done by own self for market or product.  Free offers,free samples of products,exp on artwork or royalty.  Winning trips by customer or client (travel+lodging+boarding)  Distribution of free trade samples. Excludes:  Brokerage & selling Com.  Exp on salesman(being em’ee)  Rebates,discount & bonus points on credit card.  Incentives to distributor.  Market or product research from outside agency.  Exp on call centers as post sale services.  Exp on ad-films. “S.P & Publicity” u/s-115WB(2)(D) Rate-20%

August 19, Includes:  Group personal accidents/ workmen compensation insurance/ group health insurance/ group medical n life insurance (under non- statutory obligation).  Reimbursement by em’er on medical treatment not exceeding  Injuries  Subsidy  Various exp in em’ees colony.  Book & periodical to em’ee  Prize, rewards, awards.  Transport facility. Includes:  Group personal accidents/ workmen compensation insurance/ group health insurance/ group medical n life insurance (under non- statutory obligation).  Reimbursement by em’er on medical treatment not exceeding  Injuries  Subsidy  Various exp in em’ees colony.  Book & periodical to em’ee  Prize, rewards, awards.  Transport facility. Excludes:  Payment against Statutory obligation.  Gratuity fund  Medical exp above  Treatment of injuries- ”statutory obligation”  Construction site. “Employee’s welfare” u/s- 115WB(2)(E) Rate-20%

August 19, Includes:  Exp for clients business reimbursed.  Leave travel concession  Reimbursement of car exp.  Rent paid for operating lease. Includes:  Exp for clients business reimbursed.  Leave travel concession  Reimbursement of car exp.  Rent paid for operating lease. Excludes:  Allowance for journey from home to work place.  Allowance  Professional travels. (reimbursement) “Conveyance” u/s-115WB(2)(F) Rate-20%

August 19, Includes:  Pre-diem allowance.  On hotel,boarding,lodging. Includes:  Pre-diem allowance.  On hotel,boarding,lodging. Excludes:  Fixed hotel allowance. “ Use of Hotel,Boarding & Lodging Facilities ” u/s-115WB(2)(G) Rate-20%

August 19, Includes:  Repairs.  Running(including fuel).  Maintenance.  Depn on motor cars.  Lease rent – financial lease  Garage rent  Drivers salary  Int. on loan. Includes:  Repairs.  Running(including fuel).  Maintenance.  Depn on motor cars.  Lease rent – financial lease  Garage rent  Drivers salary  Int. on loan. Excludes:  Car excludes: Delivery vans Display vans Tempos Trucks Buses Tractor Ambulance But includes Jeep. “ Repairs,Running,Maintenance of Motor Car ” u/s-115WB(2)(H) Rate-20%

August 19, Includes:  Repairs.  Running(including fuel).  Maintenance.  Depn on Aircrafts.  Lease rent – financial lease  Garage rent  salary  Int. on loan. Includes:  Repairs.  Running(including fuel).  Maintenance.  Depn on Aircrafts.  Lease rent – financial lease  Garage rent  salary  Int. on loan. Excludes:  For em’er engaged in carriage of passengers/ goods. “ Repairs,Running,Maintenance of Aircraft ” u/s-115WB(2)(I) Rate-20%

August 19, Includes:  All except exclusions. Includes:  All except exclusions. Excludes:  Exp on leased Telephones. “Telephones(including Mobile)” u/s-115WB(2)(J) Rate-20%

August 19, Includes:  Food in G.H  Contract charges  Rent  Maintenance charges  Rent or Hire charges to hotel if stay exceeding 182 days. Includes:  Food in G.H  Contract charges  Rent  Maintenance charges  Rent or Hire charges to hotel if stay exceeding 182 days. Excludes:  Exp on refrigerator, t.v, furniture, etc  Depreciation on G.H  Maintenance exp for training purpose. “Guest house” u/s-115WB(2)(K) Rate-20%

August 19, Includes:  Meeting/get together on festive occasions. Includes:  Meeting/get together on festive occasions. Excludes:  On independence day or republic day. “Festival Celebrations” u/s-115WB(2)(L) Rate-50%

August 19, Includes:  Hotel resort providing health & fitness facility.  Subscription for membership in club  Fitness centers, health saloon, gymnasium, massage centers, slimming center, aerobics. Includes:  Hotel resort providing health & fitness facility.  Subscription for membership in club  Fitness centers, health saloon, gymnasium, massage centers, slimming center, aerobics. Excludes: “Use of health club & similar facility” u/s-115WB(2)(M) Rate-50%

August 19, Includes:  Entrance fee  Reimbursement of exp Includes:  Entrance fee  Reimbursement of exp Excludes:  Depreciation on club building  Fixed club allowance. “Use of any other Club facility” u/s- 115WB(2)(N) Rate-50%

August 19, Includes:  In cash  In kind  Trade promotion scheme (with different product)  Customers  Marriage or others  Any other person. Includes:  In cash  In kind  Trade promotion scheme (with different product)  Customers  Marriage or others  Any other person. Excludes: “Gifts” u/s-115WB(2)(O) Rate-50%

August 19, Includes:  To em’ees & others.  Em’ees sent to educational institutions.  Awarded to student or trainee. Includes:  To em’ees & others.  Em’ees sent to educational institutions.  Awarded to student or trainee. Excludes: “Scholarship” u/s-115WB(2)(P) Rate-50%

August 19, Includes:  Only traveling fair can be claimed. Includes:  Only traveling fair can be claimed. Excludes: “Tour,Travel (Including Foreign Travel)” u/s-115WB(2)(Q) Rate-5%

August 19, Industry Specific Amendments..!!! Employers engaged in the business of: HospitalityConveyanceHotel Boarding & lodging Repairs, running, Maintenance n Depn Hotel5% Construction5% Manufacture n Production of Pharmaceutical. 5% Manufacture n Production of Computer Software. 5% Carriage of Passengers/goods by Motor Car 5% Carriage of Passengers/goods by Aircraft. 5% NIL

August 19,  Employer is a must.  No segregation of expenses incurred on em’ees or others.  Capital or Revenue Expenditure.  Preoperative Expense.  Expenditure to be Calculated on Due Dates  Net expenses to be considered in case of recovery from employees.  Cost Sharing agreement with group companies.  Disallowance u/s-37,40,40A & 43B.  Employer is a must.  No segregation of expenses incurred on em’ees or others.  Capital or Revenue Expenditure.  Preoperative Expense.  Expenditure to be Calculated on Due Dates  Net expenses to be considered in case of recovery from employees.  Cost Sharing agreement with group companies.  Disallowance u/s-37,40,40A & 43B. Other Propositions..!!!-1

August 19,  Bogus Expenditure.  FBT in case of depreciation.  Reimbursement of expenditure by Client.  Accounting Records.  FBT not Deductible – as per sec – 40(a)(ic).  FBT deductible for computing Book Profits-[115JB]  Credit of FBT Paid by a foreign co. in the country of residence.  Bogus Expenditure.  FBT in case of depreciation.  Reimbursement of expenditure by Client.  Accounting Records.  FBT not Deductible – as per sec – 40(a)(ic).  FBT deductible for computing Book Profits-[115JB]  Credit of FBT Paid by a foreign co. in the country of residence. Other Propositions..!!!-2

August 19, QuarterDue Dates Apr-JunOn or before 15 th July July-SpetOn or before 15 th Oct Oct-DecOn or before 15 th Jan Jan-MarOn or before 15 th Mar(Before the quarter ends) Advance Tax due date..!!!

August 19, SectionsList 115WA 115WB 115WC 115WD(1) 115WE 115WF 115WG 115WH 115WI 115WJ 115WK 115WL Requirements of FBT Fringe Benefit Expenses Value of Fringe Benefits Return of FB Assessment Best Judgment Assessment FB Escaping Assessment Issue of notice where FB have Escaped Assessment Payment of FBT Advance Tax in respect of FB Interest for default in furnishing return of FB Application of Other provisions of this act. Section List

August 19, Updations…!!! Top 10 FBT Payers of India CompaniesFBT(fig in cr)As % of employee expense. SBI IOC RIL373.1 ICICI HLL355.4 SAIL BHARTI TCS ITC TISCO161.1

August 19,  Infosys – dating exp reimbursed by em’er  kingfisher airways & Air deccan: Indirect benefits provided. "Awake, Arise and Stop not, till the goal is achieved."  Infosys – dating exp reimbursed by em’er  kingfisher airways & Air deccan: Indirect benefits provided. "Awake, Arise and Stop not, till the goal is achieved." Case Laws…!!!

August 19, Thank You!