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Fringe Benefits |
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The Fringe Benefits include any privileges or compensation from the employer to the employees apart from the wages or cash salary. Fringe Benefit tax is a kind of tax, which is levied on the fringe benefits offered to the employees by an employer.
The Fringe Benefits include any compensation from the employer to the employees. According to section 115WB of the Finance Bill, the Fringe Benefits have been defined as, “ any privilege, service, facility or amenity directly or indirectly provided by an employer to his employees (including former employees) by reason of their employment”. The fringe benefits are offered by the employer in addition to the wages or cash salary.
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The tax levied on Fringe Benefits includes employee compensation other than the wages, health insurance, life insurance, tips, and pension plans.
The Fringe Benefits also includes any expense or any payment made for the purpose of the following:
- Festival Celebrations
- Gifts
- Entertainment
- Use Of Telephone
- Use Of Club Facilities
- Conference
- Provision Of Hospitality Of Every Kind
- Maintenance Of Guest House
- Employee Welfare
- Use Of Health Club, Sports And Similar Facilities
- Sales Promotion, Including Publicity
- Consumption Of Fuel Other Than Industrial Fuel
- Hotel Boarding And Lodging
- Repair, Running And Maintenance Of Motor Cars
- Conveyance, Tour And Travel, Including Foreign Travel Expenses
- Repair, Running And Maintenance Of Aircraft
- Scholarship To The Children Of The Employees
The employer who can be an individual, a family engaged in business profession, a firm, a company, a local authority, a sole trader, a body of individuals or an association of persons pays the Fringe Benefits. The tax on Fringe Benefits depends on the value of Fringe Benefits provided by an employer to his employees in the previous year. Some times an employer is not liable to pay the income tax and still he has to pay the fringe benefit tax.
The tax levied on Fringe Benefits depends on the total expense incurred and generally varies from 10 per cent to 50 per cent.
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