What are the heads of expenditure that are covered under FBT?
FBT
can be classified into two parts namely fringe benefits and deemed
fringe benefits. The detailed scope and the taxable quantum of
fringe benefit for both these parts are as follows:
A.
Fringe
Benefits
Nature
of Benefit
Taxable
Quantum
Any
privilege, service, facility or amenity provided directly or
indirectly, to an employee by an employer, whether by way of
reimbursement or otherwise including former employees.
No
value prescribed
Free
or concessional tickets provided to employees or their family
members for any private journey.
100%
minus any amount recovered from employee.
Any
contribution made to superannuation fund
100%
B.
Deemed Fringe Benefits
Nature
of Benefit
Taxable
Quantum
Entertainment
20%
Extending
Hospitality
20%,
5% for Hotels
Conference
(exceptions)
20%
Sales
Promotion (exceptions)
20%
Employees’
welfare sparing a few cases
20%
Conveyance,
tour and travel including foreign travel
20%,
construction, pharmaceuticals and software companies 5%
Use
of hotel, boarding and lodging facilities
20%,
pharmaceuticals and software companies 5%
Repair,
running (including fuel), maintenance of motorcars and the amount
of depreciation thereon
20%,
transport companies 5%
Repair,
running (including fuel), maintenance of motorcars and the amount
of depreciation thereon
20%,
airline companies 0%
Use
of telephone (including mobile phone) other than expenditure on
leased telephone lines
20%
Maintenance
of any accommodation in the nature of guest house (other than
accommodation used for training purposes)
20%
Festival
celebrations
50%
Use
of health club and similar facilities
50%
Use
of any other club facilities
50%
Gifts
50%
Scholarships
50%
Exceptions:-
FBT
will not cover privilege, service, facility or amenity for which
tax has been paid or borne by the employee.
Sales
promotion does not include the following
Expenditure
on any print or electronic media
Expenditure
on any event, fair, conventions, etc.,
Expenditure
on sponsorship of any sport event organised by the government or
trade association or body.
Expenditure
on publication of any notice pursuant to law.
Expenditure
on advertisements in any mode.
Expenditure
on payment to any advertising agency for any of the above purpose.
