Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: articles on VAT and GST in India :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: due date for vat payment :: VAT Audit :: TDS :: VAT RATES :: empanelment
« General »
 India’s GST among most complex in world, and it is 0% tax rate that is hurting the idea
 Can’t overrule courts with retrospective amendments, says Supreme Court
 Why tax planning should be an all-year round activity
 8 financial tasks you should do in the next 30 days
 Income Tax department may defend CPC in returns fraud case
  Income tax department sends notices to investors over tax treaty gains
 Seven months after GST rollout: Time for handholding over, Centre to intensify efforts to curb tax evasion
 Individual angels may get tax relief too
 The differences between tax and cess
 Startups that raised funds from angel investors face tax scrutiny
 Tax collection assumptions in India's budget ambitious

Simple, sensible norms to tax perks
July, 11th 2009

When a tax contributes just about 2.3% to the direct tax kitty, it makes little sense to continue with it, particularly if the cost of compliance is high. In that context, the decision to abolish the fringe benefit tax (FBT) is welcome.

India Inc should also be happy the government did not take up the second part of its suggestion, i.e., raise the corporate tax rate by a couple of percentage points to make up for the revenue loss. However, the decision to replace FBT with a tax on perquisites would no doubt raise the tax liability of the salaried class. And perhaps even complicate their tax calculation.

The onus is on the Central Board of Direct Taxes to write out the notification for taxing perks that is simple to understand and leaves little room for misinterpretation, while ensuring the objectives for which the FBT was introduced are also met.

Readers may recall former FM P Chidambaram had introduced the impost to comprehensively tax all the fringe benefits provided by companies to employees, particularly those at the senior level, over and above their salaries. He had set the tax rate at 30% for a list of perks.

Many suspected the exercise was meant to be only a revenue generating measure, although Mr Chidambaram had argued, vociferously, that it was meant to ensure greater vertical and horizontal equity. For instance, a person who received his entire income in cash bore a higher tax burden than a person who got part of his salary as fringe benefits.

Also, it was mostly the senior executives who enjoyed the benefits, but paid disproportionately lower taxes as compared to those who were not provided such benefits.

If the measure was indeed aimed at generating revenues, collection of Rs 8,000 crore last fiscal and Rs 7,100 crore in 2007-08 does not fully justify the effort companies had to put into calculating their liability. Yet the objective sought to be achieved by FBT is excellent.

Peoples tax liability should be directly proportional to their incomes, received both in cash and kind. We hope the proposed perks tax notification is comprehensive, the method for valuation clearly defined and sensible, and individuals are not overtaxed.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Contact Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions