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: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: TDS :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: articles on VAT and GST in India :: list of goods taxed at 4% :: VAT Audit :: empanelment :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4%
 
 
News Headlines »
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned
 All about income tax return form Sahaj
 Why seeing Form 26AS is a must before filing tax return and how to access it
 No tax on notice period pay cut
 Interpretation Of Central Goods And Services Tax (Cgst) Act (Part-1)
 What to do if you haven’t filed your taxes
 Income Tax Declaration To Employer: 10 Changes You Should Be Aware Of
 What your income tax says about you

Companies swear by Esops despite FBT dampener
September, 07th 2007
Companies still believe that employee stock options work as a motivational driver for employees notwithstanding the fringe benefit tax levied on Esops, according to a survey of knowledge-economy companies by Deloitte Haskins & Sells (DHS). Levy of fringe benefit tax on Esops was announced in the Union Budget 2007.

We chose to figure out if the knowledge economy companies picture the budgetary development as a dampener to the companies, said DHS partner KR Sekar.

About 68% of the respondents viewed the tax as a cog in the wheel and cited increase in administrative process as different employees would sell at different points of time which could, in turn, create legal hurdle for performance and returns of the company . Also 90% of the respondent companies are inclined to continue with the practice of issuing Esops at lower than the fair market value.

As the company has an option to recover FBT from the employees, respondents have said that the FBT would be factored as part of the cost to company (CTC). However, most companies admit that Esops in the light of FBT is seen to be of diminishing attractiveness from an employers perspective.

The fact that Esops continue to be considered a motivational value driver is not surprising as these have come to become key HR tool for all companies. Conflicts and controversies have not taken the sting out from companies in granting Esops, according to DHS partner M Lakshminarayanan.

While 56% of the respondents were open to the idea of passing on the incidence of the FBT (to the employees ), curiously, 58% of the respondents felt that recovering the FBT from the employee was not acceptable .
As regards the tax deductibility of FBT, companies have indicated it to be an expense and deductibility to be allowed only if FBT is not being passed onto the employee.

ITS WORTH SWEATING

68% companies term FBT as a cog in the wheel, 90% to continue with Esops at lower than fair market value, 56% for passing on incidence of FBT (to employees), 58% recovering FBT from employee not acceptable.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Experience

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