The removal of the Fringe Benefit Tax proposed in the Budget is being regarded as a welcome move for companies and may also provide them scope to restructure employee remuneration, HR experts said.
According to HR experts, although the Budget has not concentrated much on the salaried corporate professionals, the the abolishment of FBT will provide some relief for companies, which may look at restructuring employee salary structures.
"While the abolishment of the FBT is a welcome move from employers, it may not be an unmixed blessing.
"The removal of the FBT means that perquisites will be taxed in the hands of employees at the marginal rate of tax applicable to them...we will have to await the valuation rules applicable to perquisites," PricewaterhouseCoopers India Leader for People and Change practice R Sankar told PTI.
However, there is a scope for restructuring employee remuneration taking into account the tax proposals, he added.
"With the withdrawal of FBT, we can look forward to companies reintroducing and strengthening superannuation plans as the third retirement benefit for their staff," Mercer Consulting India business leader, Information product solutions, Gangapriya Chakraverti said.
Hewitt Associates Practice Leader - Performance & Rewards South & West Asia, Sandeep Chaudhary said that the FBT abolishment comes as a positive for the employers although it might not be so good for the employees.