to put it in simple terms,it is the tax on the non-developmental expenses of the firm or companies but not of individuals.non-dev here are those expenses of the firm that dont relate to the company's business and precisely,it taxes on the incentives(or benefits) given by the firm to the employees.it taxes such expenses like entertainment expenses incurred on the employees only and not on the guests to the firm who have come to discuss business with it,since the expenses incurred on them are developmental meaning that it helps to improve the biz of the firm.
FBT IS A VAST CONCEPT JUST AS SOMEONE PREVIOUSLY PUT IT.
Hope u got an idea as to how FBT works.
2006-07-12 01:29:33
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answer #1
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answered by chaks 2
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Fringe Benefits Tax (FBT) is a taxation of most, but not all fringe benefits, which are generally non-cash employee benefits. The rationale behind FBT is that it helps restore equity and fairness to those employees who do not receive such benefits.
This king of taxation is done in a number of countries and the applicable laws vary
For India->
Fringe Benefits Tax (FBT) is the tax applied to most, although not all, fringe benefits. A new tax was imposed on employers by India's Finance Act 2005 introduced for the financial year commencing April 1, 2005.
The following items are covered:
Employer's expences on entertainment, travel, employee welfare and accommodation. The definition of fringe benefits that have become taxable has been significantly extended. The law provides the exact list of taxable items.
Employer's provision of employee transportation to work or a cash allowances for this purpose.
Employer's contributions to an approved retirement plan (called a superannuation fund).
2006-07-15 06:42:21
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answer #2
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answered by vishal 3
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If you live in India....
Fringe Benefits Tax (FBT) is the tax applied to most, although not all, fringe benefits. A new tax was imposed on employers by India's Finance Act 2005 introduced for the financial year commencing April 1, 2005.
The following items are covered:
Employer's expences on entertainment, travel, employee welfare and accommodation. The definition of fringe benefits that have become taxable has been significantly extended. The law provides the exact list of taxable items.
Employer's provision of employee transportation to work or a cash allowances for this purpose.
Employer's contributions to an approved retirement plan (called a superannuation fund).
2006-07-08 13:18:37
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answer #3
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answered by DeZZy 2
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Fringe benefits are most benefits or perks given to employees on top of their salary or wages. Hence fringe benefit tax is a tax on benefits given to employees that are provided through his emloyer. You may have some questions in ur mind, which u would ask someone as follows -
U may ask that if u were an employer what wuld u exactly have to do? - As an employer, you must generally pay fringe benefit tax (FBT) on the value of any fringe benefits (perks) you give to your employees, shareholders or other people associated with your business.
Who are eligible for FBT - Companies, firms are eligible but individuals, trusts association of persons or body of individuals, whether or not incorporated, shall be exempt from the term employer.
How often must i file an FBT return ? - FBT returns can be filed either quarterly, income year or annually. However the advance tax has to be paid quarterly. You need to file NIL return even if u dont pay FBT during the year.
What is the rate of FBT ? - FBT is charged every assessment year commencing on or after 1st April 2006 at the rate of 30% on the value of such fringe benefits. The tax on such fringe benefits shall be payable by such employer.
What are the due dates ? - in case of companies and where the employer's accounts are to be audited, 31st October of the assessment year and in case of any other employer, the 31st July of the assessment year.
FBT is a vast concept. I have tried to give u the basic points that one needs to keep in mind.
2006-07-09 11:12:52
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answer #4
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answered by shrruti v pillai 1
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