The Finance Act 2005 has introduced a new tax called 'income-tax on fringe benefits' w.e.f. 01.04.2006. This shall be in the form of additional income tax levied on fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year. Rate of tax :
The tax on fringe benefits shall be levied at the rate of 30% on the value of fringe benefits provided. Liability to pay:-
The liability to pay this tax is to be borne by the employer including
Fringe benefits have been defined as including any consideration for employment provided by way of
Further, fringe benefits shall be deemed to have been provided if the employer has incurred any expense or made any payments for various purposes namely, entertainment, provision of hospitality, conference, sales, promotion including publicity, employees welfare, conveyance, tour & travel, use of hotel, boarding & lodging etc.
For further details/current status/clarifications on the above, please click here to log on to the web site of Income Tax Department.
Fringe Benefit Tax stands withdrawn with effect from the Assessment Year commencing from 1st April 2010 in terms of Finance Act 2009.
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