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?

AI Summary

Companies Must Not Differentiate Perquisite Calculations; Perquisites and Fringe Benefit Tax Are Mutually Exclusive Under Rule 3a. A query was raised about the differentiation in perquisite calculation by a company between third-party and self-lease arrangements. It was clarified that companies cannot differentiate between these and may opt to pay average tax on company-leased accommodation. The question arose whether this can be treated as Fringe Benefit Tax (FBT) and if the company can pay 6% FBT, ignoring rule 3a, instead of average tax. The response clarified that the provisions for perquisites and FBT are mutually exclusive, applying to different groups of individuals.