« Top Headlines » Open DEMAT Account in 24 hrs  Mock Test Papers Series - I & II for Students appearing in CA Foundation January 2027 Examination.  Income Tax Rules 2026: CBDT Introduces Revised Form 161 for Penalty Waiver, Clarifies Misreporting Categories and Taxpayer Relief  ITR Filing and Income Tax Audit Deadline Extended: 5 Critical Things Taxpayers Must Know  Filing Belated ITR for AY 2026-27? Know Which Losses You Can Carry Forward and Which You May Lose  CBDT Extends Tax Audit Report Deadline to October 21, ITR Filing Last Date to November 21 for AY 2026-27  CBDT Extends AY 2026-27 ITR Filing Deadline for Tax-Audit Cases: New Dates and Key Compliance Details  Foreign Assets Missing From Your ITR? Income Tax Department Opens One-Time Disclosure Window  Tax Audit Deadline September 30: Why AIS, TDS and GST Figures May Not Match Your ITR and What Taxpayers Should Do  Tax audit deadline September 30: Common mistakes taxpayers should avoid  Your ITR says ‘verified’, but the refund hasn’t arrived? 5 reasons why your money could be stuck  Missed the ITR Deadline but TDS Refund Is Due? Here’s How You Can Still Claim Your Money «  Popcorn that saved dressed chicken... Taxing dividends of agricultural companies... » 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.)