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    Cp knowledge: 31 fbt presentation ankit Cp knowledge: 31 fbt presentation ankit Presentation Transcript

      • Welcome to session on
      • Fringe Benefit Tax
      • Scope
      • And
      • Financial Implications
    • Contents
      • Presentation
      • Improvement planned in gathering data for FBT
      • Questions /Answer Time
    • Brief Overview
        • Introduced by Finance Act, 2005 and applicable from FY
        • 2005-06.
        • Rationale behind FBT is to tax benefits that are collectively enjoyed by employees ( not taxed in their hands ) and certain deemed fringe benefits.
        • FBT is payable by employer at tax rates applicable for the financial year on the value of Fringe Benefits (Applicable Rate for FY 07-08 is 30% + Surcharge + Cess )
        • FBT is chargeable on defined % of total expenses falling under each category defined by the Finance Act.
    • Valuation of Fringe Benefits 100 Any privilege, service facility provided directly or indirectly, provided by the employee either through reimbursement or otherwise. ( to his employees including former employees ) 20 Employees’ welfare 20 Sales Promotion including publicity 20 Conference 20 Provision of hospitality 20 Entertainment; Fringe benefits shall be deemed to have been provided by an employer if any expense is incurred or payment made for the following purposes: 100 Employer’s contribution to an approved Superannuation Fund; 100 Any free or concessional tickets provided by the employer for private journeys undertaken by the employees or their family members; (excluding that included in LTA/LTC) Value (in %) Description of Fringe Benefit s
    • Valuation of Fringe Benefits (contd..) 50 Scholarships 5 Tour & Travel including (Foreign Travel) 50 Gifts; and 50 Use of any other club facilities; 50 Use of health club and similar facilities; 50 Festival Celebrations; 20 Maintenance of any accommodation in the nature of guest house 20 Use of Telephone (including mobile phone, and other than expenditure on leased telephone lines; 20 Repair, running (including fuel), maintenance of motor cars and the amount of depreciation thereon; 20 Use of hotel, boarding and lodging; 20 Conveyance Value (in %) Description of Fringe Benefit s
    • Contribution to Superannuation Fund
      • Excludes
      • The amount of Contribution which
      • does not exceeds 1 Lakh rupees in
      • respect of each employee.
    • Entertainment
      • Includes Expenditure for
      • Exhibitions
      • Performance
      • Amusements
      • Games/Sports
      • Meetings/Get together of employees and their family on non festive occasions
      • For affording some sort of amusements and gratification .
    • Conference
      • A training Programme entails congregation of number of
      • person for discussion or exchange of views.
      • Includes
      • Expenses for attending training/conference outside factory/office such as Hotel, Travelling, Conveyance
      • Dealers and Vendors Conference.
      • Excludes
      • In house training of Employees
      • Participation fees of employees in any outside conference/training
    • Provision for Hospitality
      • Includes
      • Every kind of provision for hospitality through food or beverages or in any other manner.
      • Excludes
      • Expenditure on Food or Beverages provided by Employer to Employees in Office or Factory.
      • Expenditure on Non-Transferable Food Coupons
    • Sales Promotion including publicity
      • Includes
      • Expenses for Free offers (with products) such as freebies like tattoos, cricket cards or similar products to trade or consumers.
      • Excludes
      • Advertisement in any print or electronic media or transport system.
      • Holding or participation in any press conference, fair, exhibition or convention.
    • Sales Promotion including publicity
      • Exclusions Continued
      • Publication of any notice (under any law, Court or Tribunal order) in any print or electronic media.
      • Advertisement through Signs, art work, painting, banners, direct mail, Electric spectaculars, kiosks, hoardings, bill boards or by way of such other medium.
      • Payment to any advertising agency for the purposes of above mentioned expenditures .
    • Sales Promotion including publicity
      • Exclusions Continued
      • Sponsorship of sports event or any other event organized by Govt agency or any trade association
      • Expenditure on distribution of free samples of Medicines or of Medical equipments to Doctor
      • Expenditure by way of payment to any person of repute for promoting the sale of goods or services
    • Sales Promotion including publicity
      • Exclusions Continued
      • Brokerage and Selling Commission
      • Reimbursement of Salesman (Expenses)
      • Sales Discount, Rebates allowed to whole sale dealers, customers or bonus points given to Credit Card Customers.
      • Incentives to Distributors.
      • Product marketing research Expenses
      • (If Outsourced)
      • Call Center Charges for canvassing Sales and carrying out post sale activities.
    • Employees Welfare
      • Includes
      • Group Health/Accident/Medical/Life Insurance, Workman Compensation Insurance. (if Statutory not required)
      • Medical Reimbursement up to limit of 15000/-.
      • Reimbursement of late night snacks to employees.
      • Uniform if not statutory required
      • Reimbursement of Expenditure on Books and Periodicals
      • Prizes/Rewards (Non Monetary )to Employees
      • Transportation facility to children of Employees.
    • Employees Welfare
      • Inclusions (Continued)
      • Expenses on treatment of Injuries during working hours in a hospital not maintained by employer if statutorily not required.
      • Subsidy to school not meant exclusively for employee’s children.
      • Gardening, Site cleaning, Light Decoration, School, Library, Mess, Television, Cable Connection etc in Employees Colonies.
    • Employees Welfare
      • Excludes
      • Payment for Statutory Obligation/Mitigate occupational Hazards or provide first Aid facility or Dispensary Maintained or run by employer.
      • Expenses in Hospital /Dispensary maintained by employer for injuries during working hours.
    • Conveyance
      • Includes
      • Reimbursement for Car Expenses on basis of bills submitted, Driver Salary on Declaration.
      • Lease Rentals of the vehicles on Operating Lease.
      • Excludes
      • Free or Subsidized transport provided to employees for Journey from Home to Office Back
    • Hotel Boarding and Lodging
      • Includes
      • All Hotel Expenses
      • Pre-Diem Allowance paid to employees for meeting Hotel Expenses. (Daily Allowance)
    • Running/Maintenance of Motor Car
      • Includes
      • Expenses on Repair and Maintenance of Motor Cars
      • Lease rentals for Finance Lease of Cars.
      • Depreciation of Vehicles on Pro-rata basis
      • Interest on Loan for Cars
      • Driver’s salary
      • Garage and Parking slots rent
    • Running/Maintenance of Motor Car
      • Excludes
      • Expenses for Delivery/ Display Vans trucks/Lorries ,ambulance and tractor
    • Use of Telephone
      • Includes
      • Payments for Mobile Phone
      • Payment of any Telephones in the office/Factory.
      • Excludes
      • Payment made for Leased Telephone Lines.
    • Guest House
      • Includes
      • Rent for Guest House
      • Any Accommodations in Nature of Guesthouse
      • Food at Guest House
      • Maintenance charges of Guest House
      • Contract Charges for Guesthouse Staff
    • Guest House
      • Excludes
      • Capital Expenditure in Guest House
      • Depreciation on Guest House
    • Festival Celebration
      • Includes
      • Meeting of Employees or their families on the occasion of Navratri, Diwali, ID, Christmas, New Year.
      • Excludes
      • Celebration Expenses of Independence Day & Republic Day.
    • Use of Club and Similar Facility
      • Includes
      • Entrance Fees or Membership Fees of Club
      • Excludes
      • Depreciation on Club Building if owned by Employer
    • Gifts
      • Any Thing Given or Presented without Consideration.
      • Includes
      • Gifts under Trade Scheme for Promotion of Company’s Product
      • Gifts to Customers
      • Gifts to Employees (On any Occasion)
      • Gifts in Kind (At Cost)
    • Scholarships
      • Includes
      • Education of Employees sent to Education Institute
      • Expenses Incurred /Paid for Scholarships either to Employees or any other Person.
      • (Student and Trainees)
    • Tour & Traveling (Including Foreign)
      • Includes
      • Payments made for Traveling for any Employee or any purpose.
      • Excludes
      • Payments made for Traveling for the purpose of Conference
      • Payment for LTC/LTA to Employees.
    • Important Notes for FBT
      • Employer Employee Relation is Prerequisites for the Levy of FBT
      • Proximate Purpose to be looked for the Classification under different clause.
      • Includes
      • Pre-operative Expenses
      • Capital Expenses
      • Reimbursements
      • Provisions for the Expenses
      • Not Applicable for Advance payments.
      • Thank You