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 STANDARD :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: VAT RATES :: Central Excise rule to resale the machines to a new company :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: articles on VAT and GST in India :: empanelment :: TDS :: list of goods taxed at 4% :: due date for vat payment
 
 
News Headlines »
 Income-tax (17th Amendment) Rules, 2017
 GST: One nation, one market, one tax
 Ready or not, businesses brace for biggest-ever tax reform
 Ready or not, businesses brace for biggest-ever tax reform
 Make your inventory and invoicing software GST Ready from Binarysoft
 Filing income-tax returns gets simpler for salaried persons
 Ten rules you must follow while filing income tax returns
 Reforming the income tax tribunal
 How the new system might impact consumers and businesses
 10 ways you get benefited from filing your tax return
 Returns under CGST Act,2017 with Rules

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