what is the meaning of fbt? tell me diffrent type of fbt
rate? & when it will consider in accounting?
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Answer Posted / vijay mashalkar
Fbt means Fringe Benifit Tax is a tax levied on perquisits
or frienge benifits provided by an employer to his
employees.
Types of FBT & Rates
Fringe benefits shall be deemed to have been provided if
the employer has incurred any expense or made any payment
for the purposes of:
(A) Entertainment;
(B) Provision of hospitality of every kind to any person,
whether by way of food or beverages or in any other manner
excluding food or beverages provided to the employees in
the office or factory or non transferable paid vouchers
usable only at eating joints or outlets;
(C) Conference excluding fee for participation by the
employees in any conference;
(D) Sales promotion including publicity but excluding
specified expenditure on advertisement;
(E) Employee welfare excluding any expenditure or payment
made to fulfill any statutory obligations or mitigate
occupational hazards or provide first aid facilities in the
hospital or dispensary run by the employer;
(F) Conveyance tour and travel (including foreign travel);
(G) Use of hotel, boarding and lodging facilities;
(H) Repair, running (including fuel) and maintenance of
motorcars and the amount of depreciation thereon;
(I) Repair, running (including fuel) and maintenance of
aircrafts and the amount of depreciation thereon;
(J) Use of telephone (including mobile phone) other than
expenditure on leased telephone lines;
(K) Maintenance of any accommodation in the nature of
guesthouse other than accommodation used for training
purposes;
(L) Festival celebrations;
(M) Use of health club and similar facilities;
(N) Use of any other club facilities;
(O) Gifts; and
(P) Scholarships.
(a) Cost of free or concessional ticket for private
journeys of the employees or their family members as
provided by the employer to the general public as reduced
by the amount, if any, paid by, or recovered from, his
employee or employees;
(b) The actual amount of contribution made by the employer
to an approved superannuation fund for the employees; and
(c) A specified percentage of each of the expenses
enumerated as items (A) to (P) in the earlier paragraph. In
case of the items (A) to (K), the specified percentage is
20% and for items (L) to (P) it is 50% of the expenses
referred to therein, subject to the following exceptions,-
(i) Where the employer is engaged in the business of hotel,
a lower rate of 5% of the expenses incurred on hospitality
have been specified for purposes of calculating the
liability under the FBT.
(ii) Where the employer is engaged in the construction
business, 5% of the expenses in the nature of conveyance,
tour and travel (including foreign travel) have been
specified;
(iii) In the case of an employer engaged in the manufacture
or production of pharmaceuticals or computer software, the
value of fringe benefit under the heads conveyance, tour
and travel (including foreign travel) and use of hotel,
boarding and lodging facilities is restricted to 5% of such
expenses;
(iv) Where the employer is engaged in the carriage of
passengers or goods by motor car, a lower rate of 5% of
expenses on repair, running (including fuel) and
maintenance of motor cars and depreciation thereon has been
specified.
(v) In the case of an employer engaged in the carriage of
passengers or goods by aircraft, the value of fringe
benefits under the head expenses on repair, running
(including fuel) and maintenance of aircrafts and
depreciation shall be Nil'.
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