Applicability of FBT

[Rahul Bagaria]

Whether FBT will be attracted on the Company leased car and house which has been leased in the name of the company and the company is paying rent on behalf of the employee and recovering from his/ her salary In both the above cases please help me to know on the monthly EMI/Rent paid by the company on behalf of the employee, whether FBT will be attracted.

[Mukesh Kumar]

As per the query it appears that the amount is not an expenditure in the hands of company. The amount towards installments or rent or lease is paid by the company of behalf of the company and would not qualify the provisions of FBT. NO clause of section 115WB appears to cover the above transactions within its scope. Therefore, the same should be liable for FBT.

AI Summary

Fringe Benefit Tax applies where employer pays employee's leased car or house installments recovered from salary. Whether Fringe Benefit Tax applies where a company pays lease installments or rent for assets leased in the company's name but recovers the amounts from the employee's salary; the advisor observes that such payments are not expenditure in the company's hands, that no clause of the relevant provision appears to cover these transactions, and treats the situation as determinative for FBT liability.