Hi,
Sorry for forgetting to add, there is a provision of FBT, i.e., Fringe Benefit Tax, on various allowances such as furnishing allowance, book allowance, fuel and maintenance expenses, and it's almost 33%.
Further, you may read more about FBT on this link:
http://inhome.rediff.com/money/2005/aug/31tax.htm
OR
http://www.moneycontrol.com/mccode/n...?autono=164217
Warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)
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Fringe Benefit Tax
Fringe Benefit Tax ("FBT") was introduced by the Finance Act of 2005 as an 'additional income tax' payable by an employer at the rate of 30% (plus surcharge and education cess) on the prescribed value of fringe benefits deemed to have been provided by the employer to its employees.
Fringe benefit means any consideration for employment provided by way of:
- Any privilege, service, facility, or amenity, directly or indirectly, provided by an employer to employees/former employees, whether by way of reimbursement or otherwise (including former employees);
- Free or concessional tickets provided for private journeys of employees or their family members; and
- Employer's contributions to an approved superannuation fund for employees.
Fringe benefits do not include any privilege, service, facility, or amenity on which tax is paid or payable by the employee.
For the purposes of deemed fringe benefits, the FBT legislation has identified an exhaustive list of expenses that are deemed to be fringe benefits to the extent of 20% or 50% of the cost incurred or payment made by the employer.
FBT paid by an employer is not an allowable expenditure while computing the net taxable income of the employer. Furthermore, FBT is payable even where no income tax is payable by the employer.
Source:
http://nasscom.in <link updated to site home>