If you are giving "gift" to employees for X'mas the FBT rate will be 50% of total expenses *33.99%. ie nearly 17% tax on the total expenses. But there is a possibility of avoiding this tax. As per the FBT rules there is no FBT for advertising other than some old kind of advertising like writting in the walls etc.,and while considering this fact there is a loophole for you. I saw the other posts regarding the Ipod and if you are going to gift them an Ipod then do one thing embed the name, address and logo of your company in the IPod ( this is for bringing it under the preview of advertisement as per the definition given by them in the FBT rules for advertising)so that you can claim it under the advertising expenses and no need to pay the FBT. But if you dont put the name, logo etc it will come under FBT for gift. But also compare with the cost of putting the Logo and the FBT that has to be paid if no logo is embeded and Ipod is giving as a gift.
18th December 2008 From India, Kottayam
I forwarded the same idea to my company's HR and she appreciated it too. Even gifting a small 1GB iPod shuffle would be enough to boost the motivational factor among employees.
30th December 2008 From India, Bangalore