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The only thing that has been left out is medical reimbursement. So guess we will have to start working on our old style of straight package which had not flexi benefits.
If any one else does come across any other means around this FBT please do share this information with all of us here.
4th May 2005 From India, Bangalore
Off the record, a known person workin for sodexho has informed me that it cost SodexHo approx 5 Crores to clear themselves from FBT as it had ruined their business totally. Chidambaram is a richer man by a few couple crores for sure ;)
6th June 2005 From India, Pune
1. If the company keeps of giving benefits (computer rent, company owned chauffer / car etc) the company will have to pay another 30% over and above the actual cost as Tax..
2. If the company merges the same with the salary figures (stops giving benefits and increases the salary) the employee has to pay Income Tax on the same...
Result : Government is richer / while we are poorer.....
The Fact is most of the companies are now cutting of Fringe Benefits and are passing on cash to the employees in terms of higher salary.... (Our company has stopped giving computer rental and has merged the amount with salary)
So employees beware, you will have to pay additional Income Tax...
6th June 2005 From India, Ahmadabad
6th June 2005 From India, Bangalore
On the FBT.
Sodexho Meal voucher is out of FBT
Sodexho Gift voucher is still remains under FBT.
I have been talking to my friends in IT companies and the the conclusion is most of the companies are doing away with flexibile components.
But, I have question - can we increase the Sodexho meal voucher limit ?
7th June 2005 From India, Bangalore
Have just finished salary structuring post FBT exercise after consulting quite a few firms including the audit firm which is one of the top three in India.
The suggested changes are as follows-
HRA – 50 % for 4 cities & 40 % for other towns, the exemption is available under IT act under three rules viz
Actual rent reciepts 15000
HRA as per the salary 12,415
Actual rent reciepts less ten pcet over Basic 12,517
Least of the three would be applicable for exemption for Tax under section 10 ( in the above case Rs 12,415)
Conveyance – Rs 800 / pm , this is to be excluded if the employee has been provided a company owned car or a leased car. In the case of latter the employee would be taxed for the perquisite.
Child Education allowance – Rs 100 /pm per child max upto 2 child viz Rs 200 per month.
If the employee has a child staying in a hostel then Rs 350/pm
If the company is promoter of educational institutional where the children of employees get the preference or admission then Rs 1000/ pm per child upto 2 children is exempted from tax.
Sodexho meal vouchers : Rs 1500 per month
Medical Reimbursement : - Rs 15,000 p.a
Leave Travel allowance : not taxable if rules are followed under IT Act and also FBT has been not very clear on this issue.
PF Contribution: 12 % of the company’s contr
Many companies provide special allowance – which is fully taxable like basic but no exemption is available like basic whose 12% contribution provides the tax shield under section 88 which is maximum upto Rs 1 Lac only.
14th August 2005 From India, Pune
You can have the following components :
Basic - fully taxable
HRA - Partially taxable (subject to exemptions as Rajat mentioned)
Conveyance - Rs.800/- p.m. or actual conveyance received whichever is least. Please note that you can claim conveyance only for the work days.
Medical - Unlike conveyance, you are eligible for Rs15000/- per annum against medical reimbursements.
LTA - can claim twice in a block of two years
Sodexho - Please note that there is no ceiling on this. Finance Act has conveniently forgotten about this and reading between the lines, the employee can be paid any amount of food coupons. But, considering the utility employees settle down to their own convenience.
Company Leased accomodation - Now this is 20% of non-perq salary and not sensible to accept for this facility.
The balance amount can be paid as special allowance.
Still the employee benefits, because instead of paying 33.66% he will be paying only 6.732%.
FBT is a welcoming trend for Organisations to stream line their books of accounts. Let us see how our people are to manage this.
Regarding chapter VIA exemptions, employers are now reluctant to consider for section 192, following the stringent regulations from CBDT.
14th August 2005 From India,
HRA 40% of the Basic + DA (Can be claimed exemption in case of Rental)
Edn Allowance 200 per month
Transport Allowance 800 per month
SPecial Allowance (Taxable)
Medical Reimbursement 15000 per annum
Food Coupons (Food Vouchers) 15600 per annum (1300 per month)
Annual Gift Voucer Rs 5000 per annum
LTA (taxable once in two years)
23rd August 2005 From India, Hyderabad
It is aimed at taxing the indirect benefits extended by the employer to the employee which were so far out of the tax net
31st August 2005 From India, Madras