« Top Headlines » Open DEMAT Account in 24 hrs  Delhi HC Rules GST Registration Cannot Be Cancelled Retrospectively Without a Clear Show Cause Notice (SCN)  Belated income tax return AY 2026-27: How to file, late filing charges and what you may lose  Major Financial Changes from August 1, 2026: ITR Deadline, RBI MPC Meeting, Tatkal Ticket Rules & More  Government proposes to ease tax relief conditions for offshore funds  TallyPrime Connected Banking: Automating Banking and Accounting  ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update  ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide  Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers  Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It  ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes  Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs «  12 new services to be in tax net... Tax dept approaches SC to make lottery co cough up service... » Govt likely to exempt PSBs from FBT on pension funds January, 18th 2008 The government is examining a proposal to exempt public sector banks from fringe benefit tax (FBT) on their contribution to statutory pension funds. The banking industry believes that since the pension schemes are not voluntary, they should not attract FBT. Banks are pitching for a blanket exemption even though they enjoy an exemption on contributions up to Rs 1 lakh annually towards an employees pension. In most cases, individual contributions do not breach the Rs 1-lakh limit. Moreover, FBT is levied on superannuation funds that are provided in addition to provident fund. In the case of public sector banks, however, they were given a choice between pension funds and provident funds, where pension funds substituted PF for the employees who opted for pension in lieu of contributory PF in a bipartite settlement in 1993. Except State Bank of India, no other bank provides all three benefits of PF, pension and gratuity. Thus, banks believe FBT should not be levied on pension funds, one of the two retirement benefits in addition to gratuity. It is understood that a voluntary contribution to a superannuation fund in addition to the provident fund is taxable. Contributions to statutory funds are exempt to begin with. Since banks contribution to pension is not out of volition, banks should not be taxed. It is another issue that our contributions are well within the Rs 1-lakh category and are exempt anyway. However, keeping in mind future projections, we may breach the limit sooner than later, a banker said. In public sector banks, the pension scheme is statutory in nature on account of a provision in Bank Employees Pension Regulation, 1995. On the levy of FBT for contributions made by the employer to a superannuation fund, finance minister P Chidambaram had said the superannuation funds are essentially for the senior employees and are not statutory in nature.