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GLOBAL: "KPMG’s Corporate and Indirect Tax Rate Survey"

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back to index backGLOBALtalk June,  2005

India: Fringe benefit tax ("FBT") proposed

The recent budget announcement included a proposal to introduce an FBT on the value of fringe benefits provided or deemed to have been provided by an employer to his employees. Provisions introducing FBT have been included in the Finance Bill. It is to apply from assessment year 2006/07 onward.

Of note:

FBT is to be payable by every employer at the rate of 30%, or 33.66% to the extent that the surcharge and education CESS apply. The tax is not deductible.

Fringe benefits include:

any privilege, service, facility or amenity, excluding perquisites in respect of which tax is paid or payable by employees, or any benefit or amenity in the nature of free or subsidised transport or any such allowance provided for journeys from residence to the place of work and vice versa;


free or concessional ticket for private journeys; and contributions to an approved superannuation fund.

The fringe benefit is to be deemed to have been provided when the employer has incurred an expense, or made any payment.

The Finance bill also provides the method of valuing benefits for the purpose of determining applicable FBT.

Source: Deloitte - GAI

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