Fringe Benefit Tax

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  • Topic: Employee benefit, Tax, Fringe Benefits Tax
  • Pages : 13 (3196 words )
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  • Published : July 26, 2012
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GUJARAT NATIONAL LAW UNIVERSITY TITLE OF THE PROJECT FRINGE BENEFIT TAX SUBMITTED BY PRIYANK JAGAWANSHI 08B088 priyankjagawanshi@gmail.com 2008-2013 VII SEMISTER

SUBMITTED TO Mr. CHAMARTI RAMESH KUMAR ASSISTANT PROFESSOR OF LAW

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CONTENTS

ACKNOWLEDGEMENT

3

ABSTRACT

4

INTRODUCTION

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FRINGE BENEFITS TAX (FBT)

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LEGISLATION AND STATUTORY REGULATIONS

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EXEMPTIONS IN FRINGE BENEFITS TAX

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ABOLITION OF FBT – REASONS

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IMPACT OF ABOLITION OF FRINGE BENEFITS TAX

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CONCLUSION

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REFERENCES

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ACKNOWLEDGEMENT

I would like to take this opportunity to extend a word of my gratitude to my esteemed Tax Law faculty Prof. Ch. Ramesh, who had been a constant source of inspiration for me in the pursuance of this project. Sir has been gracious enough to guide me on the right path which has enabled me to strengthen my efforts. The project has been made with utmost care & with utmost finesse to see that the information mentioned is to the best of the accuracy and correctness. Despite of all the support received from all quarters, I alone am responsible for the errors that remain.

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ABSTRACT

This paper will be dealt with concept of fringe Benefits tax (FBT) which was introduced n the year of 2005 by Finance Bill 2005 and also abolished in the year of 2009 by the finance bill 2009. Various countries have this mechanism. In India it was also applied but it effects negatively. Employers were the main subject who faced various problems because of its complexities. It abolition also gives great impact as removal of double taxation and burden form employer. It brought various changes and other policies were also implemented. Government revenue also got affected by this system. It was introduced in Income Tax Act 1961 under sections 115W. Reasons for its abolition also discussed in this paper.

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INTRODUCTION
In the taxation concept of Fringe Benefits Played an important role but in the present situation it is abolished. It was first introduced by the finance Minister in finance bill 2005. It was first proposed by Hon’ble Finance Minister in Finance Bill 2005 of taxing in the hand of employer for benefits enjoyed by employees from employer.

It was new concept in India but it has been already in the countries of United states, United Kingdom, Canada, New Zealand etc. Fringe Benefits Tax (FBT) was the tax applied to most, although not all, fringe benefits. A New concept of tax was introduced because of Finance Bill 2005 commenced from April 1, 2005 but it was later abolished by finance bill 2009 by Finance Minister Pranab Mukherjee1. Rules regarding was initially proposed by the finance minister, which was based on the system followed in Australia. In India it is taxable at the rate between 10% and 50%.2

Fringe benefits are provided by the employer to their employees. For all those benefits, tax has to be paid by him as Fringe Benefit tax. Employer comes under the liability to pay all these fringe benefits taxes and for that purpose an employer can be

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http://en.wikipedia.org/wiki/Fringe_Benefits_Tax_(India)(last accessed on 21st September2011 at 12 :44 AM ) 2 ―What is fringe benefit tax?‖, Rediff Business Desk, March 22, 2005, http://www.rediff.com/money/2005/mar/22spec.htm, (as accessed on 15thSeptember 2011 at 05:55 PM.

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a company, a local authority, a firm, an association of persons or body of individuals and artificial juridical person. In all these individuals and Hindu undivided Family not included. An employer provided various benefits with cash salary and wages are taxable under fringe benefits tax.

FRINGE BENEFITS TAX (FBT)

This type of taxation is levied on benefits and perquisites provided by employer with cash, salary and wages. And that is known as Fringe Benefit Tax. So in this case it is taxable in the hand of employer. Its not taxable in the hand of employee It does not include...
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