Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: due date for vat payment :: VAT RATES :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: cpt :: list of goods taxed at 4% :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: TDS :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: articles on VAT and GST in India
 
 
News Headlines »
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act

Taxed even from the fringe
September, 30th 2006
The FBT has come to stay and extends beyond tax treaties. Golf is a lot like taxes. You drive hard to get to the green and then wind up in the hole. The Fringe Benefit Tax (FBT) the newest kid on the block appears to fit this description perfectly. The revised tax audit form has an annexure that could be taken to be a ready-reckoner for FBT. However, being new, doubts do linger as an American organisation the Population Council recently found before the Authority for Advance Rulings (AAR) reported in 2006-TIOL-10-ARA-IT. The applicant was a US-based international non-profit, non-governmental organisation engaged in carrying out charitable, scientific and educational activities which qualify for exemption under the American laws. The expenses incurred in India by the applicant, including the fringe benefits provided to the employees, are met by remittances from the head-office in New York. The applicant submitted before the AAR that it was not liable to pay the FBT under Section 115WA of the Act, by virtue of the the DTAA (Double Taxation Avoidance Agreement) between India and the US on the fringe benefits available to its employees in India. It was submitted that the FBT is chargeable when the employer is chargeable to income-tax and not otherwise, and as the applicant was not chargeable to income-tax in India for its activities in view of Article 1(2) of the DTAA, sub-section (2) of Section 115WA would not apply because sub-section (1) is not attracted. AAR ruling The AAR ruled that: Sub-section (1) of Section 115WA of the Act, provides that: (i) there shall be charged for every assessment year commencing on or after April 1, 2006, additional income-tax (in this Act referred to as the fringe benefit tax); (ii) the tax is in respect of fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year; (iii) the tax is leviable on the value of such fringe benefits at 30 per cent; and (iv) this is in addition to the income-tax charged under the Act. Sub-section (2) of Section 115WA, commences with a non-obstante clause and states that notwithstanding that no income-tax is payable by an employer on his total income computed in accordance with the provisions of the Act, the tax on fringe benefits shall be payable by such employer. Clarificatory provision This provision is clarificatory in nature. Inasmuch as sub-section (i) of Section 115WA of the Act mandates that the FBT shall be charged for every assessment year in addition to the income-tax charged under this Act, sub-section (2) thereof clarifies that even when no income-tax is payable by an employer on his total income computed in accordance with the provisions of this Act, the tax on fringe benefits shall be payable by such employer. The words `total income', computed in accordance with the provisions of this Act, are used to amplify the first limb of sub-section (1) and not to destroy it, and when Section 115WA says that the FBT is in addition to income-tax and even when no income-tax is payable by an employer on his total income computed in accordance with the provisions of this Act, it will be futile to contend that if there is no total income which can be computed in accordance with the provisions of the Act, no FBT would be payable by the employer since such an interpretation would be contrary not only to the intention of Parliament but also the plain language of the provision and the basic principles of interpretation. Clearly, a tax that has come to stay and extends beyond tax treaties. Mohan R. Lavi (The author is a Hyderabad-based Chartered Accountant.)
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Bath SEO Company Birmingham SEO Company Bradford SEO Company Brighton and Hove SEO Company Bristol SEO Company Cambridge SEO Company Canterbury SEO Company Carlisle SEO Company Chester SEO Company Chichester SEO Company Coventry SEO Compan

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