Valuation rules - FBT

[Rahul Bagaria]

Mine is a public limited company.CBDT is yet to come up with the new valuation (perquisite)rules.Of the total CTC of the employees, around 25% is in the form of reimbursements on which earlier we use to recover FBT and make the payments.Please suggest how should we proceed now as the government is yet to come up with the new valuation rules.

[Ravi Chopra]

Since there is no provision for valuation of perquisites after removal of FBT on various items, the same may not be taxable in the hands of employee with the consequence to removal of FBT. You may wait for any change in the provisions of Income Tax Rules before including the amount of certain expenditure into the salary income of employee.

[DEV KUMAR KOTHARI]

Dear Mr.Bagaria, Keep a track of new Rules. Sorry to say so your query appears to contain some mistake or it is not complete and clear. If there is actual reimbursement, based on evidence and expenses are for the business of employer, then there will be no perquisite involved. Better avoid hanky panky reimbursement. In one company it was found that large number of employees went to Kanya Kumar or other far distant places to claim maximum reimbursement. This sort of practice should be avoided. This column of www.taxtmi.com is to initiate discussion and ascertain various possible views to further the object of learning and sharing knowledge and to clear doubts. The issue placed should include some basic information about the subject matter so that readers can at least have some idea about the issue, problem,related provisions and off course the views of the initiator of the issue. This will be helpful in getting better response from learned readers. In absence of the same, the readers cannot be serious about the issue and willing to spare time to merely provide information and solutions. This is my personal view.

AI Summary

Company Seeks Guidance on Employee Reimbursements Post-FBT Removal; Awaits New CBDT Valuation Rules A public limited company is seeking guidance on handling employee reimbursements, which constitute 25% of their total cost to company, following the removal of Fringe Benefit Tax (FBT) and pending new valuation rules from the Central Board of Direct Taxes (CBDT). One respondent suggests that without FBT, these reimbursements may not be taxable as employee income, advising to await new rules. Another respondent emphasizes the importance of maintaining clear and complete queries, warns against manipulative reimbursement practices, and encourages sharing detailed information to facilitate effective knowledge exchange in the discussion forum.