FBT availability

[CHITRA HARIHARAN]

Earlier I had referred one issue relating to differentiation in perquiste calculation by a leading company between third party lease and self lease. This was clarified by Shri D Gupta stating that companies cannot differntiate between third party lease and self lease. It was further clarified that Company can opt to pay average tax on the perquiste calculation on company leased accomadation. Now the question arises whether the same can be treated as FBT and whether the Company can opt to pay 6% FBT ignoring rule 3a instead of average tax?

[Surender Gupta]

Both the provisions are mutually exclusive. Provisions of requisite are applicable to those persons who are out of FBT net.

AI Summary

Fringe benefit taxation: perquisite rules and FBT are mutually exclusive, and the taxpayer's FBT net status determines treatment. The perquisite valuation provisions and the fringe benefit tax regime are mutually exclusive: perquisite rules apply to persons outside the FBT net, and an employer cannot treat the same transaction as both subject to perquisite valuation and separately opt for fringe benefit tax; the applicable regime depends on the taxpayer's FBT net status and the exclusive operation of the relevant provisions.