Bad news for salaried person: FBT abolished
Bad news for salaried person: FBT abolished Employees enjoying perks such as rent-free accommodation, cars, chauffeurs, credit cards and club memberships may have to pay tax on the value of these benefits, with the government proposing a shift in the tax burden on perquisites (perks) from the employer to the employee. Prior to FY06, employees paid tax on certain perquisites. However, with the introduction of Fringe Benefit Tax (FBT), the onus of paying tax on perks shifted to the employer. But this is set to change yet again, with the proposed scrapping of the FBT. This time, the government plans to cast the tax net wider. “More items will now come under perquisite taxation than what was covered prior to 2005-06,” said a senior government official. Perks are benefits over and above the normal salary received by an employee. The Finance Bill 2009 says that employees will have to pay tax on Employee Stock Option Plans (ESOPS) and employers’ contribution to the superannuation fund, if