Fringe Benefit Tax watered down; Industry happy
Govt watered down the FBT provisions, introduced last year, a move that will help employers give better perks and facilities.india Updated: Feb 28, 2006 16:09 IST
Agreeing to the persistent demand from industry chambers, the government today watered down the Fringe Benefit Tax provisions, introduced last year, a move that will help employers give better perks and facilities including superannuation schemes and tour and travel to employees with less tax burden.
Announcing the changes in the Budget proposals, Finance Minister P Chidambaram doubled the limit to Rs two lakh contributed by an employer to an approved super annuation fund for tax exemption.
Tour and travel expenses will now attract just five per cent as FBT instead of 20 per cent levied last year.
In case of airline companies and shipping industry offering hospitality and hotel boarding and lodging facilities will have to pay five per cent as FBT compared to 20 per cent levied earlier.
Free samples of medicines, medical equipment distributed to doctors and expenses incurred on brand ambassadors and celebrity endorsement have been excluded from the ambit of FBT.