« Top Headlines » Open DEMAT Account in 24 hrs  How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing  Section 80DDB tax benefits for specified illnesses: 5 things to know  Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal «  12 new services to be in tax net... Tax dept approaches SC to make lottery co cough up service... » Govt likely to exempt PSBs from FBT on pension funds January, 18th 2008 The government is examining a proposal to exempt public sector banks from fringe benefit tax (FBT) on their contribution to statutory pension funds. The banking industry believes that since the pension schemes are not voluntary, they should not attract FBT. Banks are pitching for a blanket exemption even though they enjoy an exemption on contributions up to Rs 1 lakh annually towards an employees pension. In most cases, individual contributions do not breach the Rs 1-lakh limit. Moreover, FBT is levied on superannuation funds that are provided in addition to provident fund. In the case of public sector banks, however, they were given a choice between pension funds and provident funds, where pension funds substituted PF for the employees who opted for pension in lieu of contributory PF in a bipartite settlement in 1993. Except State Bank of India, no other bank provides all three benefits of PF, pension and gratuity. Thus, banks believe FBT should not be levied on pension funds, one of the two retirement benefits in addition to gratuity. It is understood that a voluntary contribution to a superannuation fund in addition to the provident fund is taxable. Contributions to statutory funds are exempt to begin with. Since banks contribution to pension is not out of volition, banks should not be taxed. It is another issue that our contributions are well within the Rs 1-lakh category and are exempt anyway. However, keeping in mind future projections, we may breach the limit sooner than later, a banker said. In public sector banks, the pension scheme is statutory in nature on account of a provision in Bank Employees Pension Regulation, 1995. On the levy of FBT for contributions made by the employer to a superannuation fund, finance minister P Chidambaram had said the superannuation funds are essentially for the senior employees and are not statutory in nature.