Union Commerce and Industries Minister Kamal Nath on Friday said he disagreed with the finance ministry on the controversial fringe benefit tax, saying the tax laws should be made simpler.
The guidelines on the valuation of employees' stock option plans (ESOPs) for calculating fringe benefit tax (FBT) will be issued by September 8.
If companies recover the fringe benefit tax on employee stock options from the beneficiaries, does it still make sense for employees to go for them?
The government would not withdraw fringe benefit tax, which was introduced in the 2005-06 Budget, but the process would be made less painful, Central Board of Direct Taxes chairman M S Darda said on Friday.
The moves will reduce the administrative burden of the department, banks and taxpayers.
Fringe Benefit Tax should be accounted as a separate item under tax expense, according to the Institute of Chartered Accountants of India.
The jettisoning of the Fringe Benefit Tax opens a can of. . . questions, mainly, says Ameet N Patel.
IT companies are dependant on headcount for their revenues and fringe benefits forms a part of the compensation payable to employees.
Confederation of Indian Industry has demanded the removal of Fringe Benefit Tax and various other direct tax reforms
The Central Board of Direct Taxes on Tuesday notified the norms for valuation of employee stock option plans (ESOPs) for calculating fringe benefit tax (FBT). The rules will take effect from April 1, 2008, and apply from assessment year 2008-09. The notification said the value of stock options of listed companies would be the listing value - the average of opening and closing price - on the day the options were vested with the employee.
Minimum Alternate Tax (MAT) has been extended to income in respect of which deduction is claimed by companies under Section 10A & 10B of the Income Tax Act.
Under the 2009-10 Budget, FBT has been abolished. While this is going to be received very favourably by the finance departments at companies, the impact on your personal finances might not be the most optimal for you.
Unveiling the Budget for 2009-10, Finance Minister Pranab Mukherjee said, "MAT was introduced to address inequity in taxation of corporate taxpayers. In the quest for greater equity, I propose to increase the rate of MAT to 15 per cent of book profit from the present rate of 10 per cent."
Donations to NGOs and charitable institutes are likely to be exempted from fringe benefit tax, a leading member of chartered accountants body ICAI said on Saturday.\n
The government on Monday extended the date for payment of first instalment of the advance Fringe Benefit Tax by a month to August 15.\n\n
The fringe benefit tax (FBT) was levied on ESOPs in the Union Budget this year and the IT industry is still grappling with the issue of how to factor in the tax.
The government may simplify Fringe Benefit Tax, rationalise tax structure and depreciation norms for research and development in the next Budget, apart from making efforts to raise the Tax-GDP ratio and garner more funds for development.
Federation of India Chambers of Commerce and Industry on Friday warned that the new taxes on the corporate sector like Fringe Benefit Tax would severely hit the tottering savings and investments.
The corporate sector on Thursday was unanimous in asking the government to go back to the drawing board regarding the fringe benefit tax on the grounds that the present tax, if enforced, would increase bureaucratic interference, paper work, rent seek
The removal of the Fringe Benefit Tax (FBT) proposed in the Budget is being regarded as a welcome move for companies and may also provide them scope to restructure employee remuneration, HR experts said.
48 companies have given stock options since Budget day.
After the FBT was introduced in 2006, the industry has been appealing to the finance ministry to exempt sales promotion schemes from its ambit since the incurred expenditure cannot be treated as employee benefits.
Employee Stock Options (ESOPs) is a significant employer-granted benefit, subject to the perquisite-based taxation system. Employee benefits used to be subject to Fringe Benefit Tax (FBT) earlier. But, now that FBT no longer exists, the earlier perquisite-based taxation has been brought in. So, in a way, this is not a new move but a reversion to the earlier system of taxation.
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