NEW DELHI: The government may extend a helping hand to India’s two-crore strong salaried class in September 2009 when the burden of paying fringe benefit tax (FBT) will be moved from the employers’ shoulders to the employees’, as envisaged in Budget 2009.
According to a finance ministry official, the new rules being framed by the revenue department could allow increasing the non-taxable portion in the conveyance allowance, which at present stands at Rs 800 per month. He, however, refused to elaborate whether the new rules would bring about such tax exemption limit for other perquisites as well.
As things stand, the employees would feel the heat during the last seven months of the current fiscal as the enhanced tax liability of the first five months would reflect in the tax deducted at source of employees from September onward, thereby reducing their monthly take-home salary.
Consultancy firm PricewaterhouseCoopers’ (PwC) executive director Ashutosh Chaturvedi said the abolition of FBT would put the burden not only on employees but also on the administrative cost of the employers due to issues of multiple compliance.
“Given the current economic situation, where salaries of employees are already under stress, it is important that they are not put in an adverse situation again,” he said.
The FBT allowances include allotment of shares free of cost or at a concessional rate, free or concessional tickets to employees for their private journeys, reimbursement on conveyance, entertainment, hospitality, food and beverages, paid vouchers to name a few.
According to a finance ministry official, the new rules being framed by the revenue department could allow increasing the non-taxable portion in the conveyance allowance, which at present stands at Rs 800 per month. He, however, refused to elaborate whether the new rules would bring about such tax exemption limit for other perquisites as well.
As things stand, the employees would feel the heat during the last seven months of the current fiscal as the enhanced tax liability of the first five months would reflect in the tax deducted at source of employees from September onward, thereby reducing their monthly take-home salary.
Consultancy firm PricewaterhouseCoopers’ (PwC) executive director Ashutosh Chaturvedi said the abolition of FBT would put the burden not only on employees but also on the administrative cost of the employers due to issues of multiple compliance.
“Given the current economic situation, where salaries of employees are already under stress, it is important that they are not put in an adverse situation again,” he said.
The FBT allowances include allotment of shares free of cost or at a concessional rate, free or concessional tickets to employees for their private journeys, reimbursement on conveyance, entertainment, hospitality, food and beverages, paid vouchers to name a few.
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