Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
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: VAT Audit :: VAT RATES :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: empanelment :: list of goods taxed at 4% :: due date for vat payment :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: TDS
 
 
General »
 The most thrilling idea before every Budget: No income tax
 Finance Ministry likely to tweak Minimum Alternate Tax norms to boost industry
 Income tax department warns people to keep away from benami transactions
 New helpline for income tax e-filing
 The Central Government notifies the Companies (Amendment) Act, 2017
 GST Returns: Government Relaxes Rectification Norms
 Will govt bring change in income tax slab? here's the present structure
 No income tax exemption to cooperative banks
 Bitcoin investors may have to pay capital gains tax
 What industry expected when Modi government implemented GST
  The Finance Resolution And Deposit Insurance Bill, 2017

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