INCOME-TAX
ON FRINGE BENEFITS
A.—meaning of certain
expressions
In this Chapter, unless the
context otherwise requires,—
(a) "Employer" means,—
(i)
A company;
(ii) A firm;
2[J2] [(iii) an association of persons or a body of individuals,
whether incorporated or not;]
(iv) A
local authority; and
(v) Every artificial juridical person, not falling within any of the
preceding sub-clauses:
3[J3] [Provided that any person eligible for exemption under
clause (23C) of section 10 or registered under section 12AA or a political
party registered under section 29A of the Representation of the People Act,
1951 (43 of 1951) shall not be deemed to be an employer for the purposes of
this Chapter;]
(b) "Fringe benefit tax" or "tax" means the tax
chargeable under section 115WA.
B.—Basis of charge
115WA. Charge of fringe benefit tax:-
(1) In addition to the income-tax charged under this Act, there
shall be charged for every assessment year commencing on or after the 1st day
of April, 2006, additional income-tax (in this Act referred to as fringe
benefit tax) in respect of the fringe benefits provided or deemed to have been
provided by an employer to his employees during the previous year at the rate
of thirty per cent on the value of such fringe benefits.
(2) Notwithstanding that no income-tax is payable by an employer
on his total income computed in accordance with the provisions of this Act, the
tax on fringe benefits shall be payable by such employer.
(1) For the purposes of this Chapter, "fringe benefits"
means any consideration for employment provided by way of—
(a) Any privilege, service, facility or amenity, directly or
indirectly, provided by an employer, whether by way of reimbursement or
otherwise, to his employees (including former employee or employees);
(b) Any free or concessional ticket
provided by the employer for private journeys of his employees or their family
members; 1[J4] [* * *]
(c) Any contribution by the employer to an approved superannuation
fund for employees; 2[J5] [and]
3[J6] [(d) Any
specified security or sweat equity shares allotted or transferred, directly or
indirectly, by the employer free of cost or at concessional
rate to his employees (including former employee or employees).
Explanation.—For the purposes of this clause,—
(i)
"specified security" means
the securities as defined in clause (h) of section 2 of the Securities
Contracts (Regulation) Act, 19564 [J7] (42 of 1956) 5[J8] [and, where employees' stock option has been granted under
any plan or scheme therefor, includes the securities
offered under such plan or scheme];
(ii) "sweat equity shares" means
equity shares issued by a company to its employees or directors at a discount
or for consideration other than cash for providing know-how or making available
rights in the nature of intellectual property rights or value additions, by
whatever name called.]
(2) The fringe benefits shall be deemed to have been provided by
the employer to his employees, if the employer has, in the course of his
business or profession (including any activity whether or not such activity is
carried on with the object of deriving income, profits or gains) incurred any expense
on, or made any payment for, the following purposes, namely:—
(A) Entertainment;
(B) Provision of hospitality of every kind by the employer to any
person, whether by way of provision of food or beverages or in any other manner
whatsoever and whether or not such provision is made by reason of any express
or implied contract or custom or usage of trade but does not include—
(i)
Any expenditure on, or payment for,
food or beverages provided by the employer to his employees in office or
factory;
(ii) Any expenditure on or payment through paid
vouchers which are not transferable and usage only at eating joints or outlets;
6[J9] [(iii) any expenditure on or payment through
non-transferable pre-paid electronic meal card usable only at eating joints or
outlets and which fulfils such other conditions as may be prescribed;]
(C) Conference (other than fee for participation by the employees in
any conference).
Explanation.—For the purposes of this clause,
any expenditure on conveyance, tour and travel (including foreign travel), on
hotel, or boarding and lodging in connection with any conference shall be
deemed to be expenditure incurred for the purposes of conference;
(D) Sales promotion including publicity:
Provided that any expenditure on advertisement,—
(i)
Being the expenditure (including
rental) on advertisement of any form in any print (including journals,
catalogues or price lists) or electronic media or transport system;
(ii) Being the expenditure on the holding of, or
the participation in, any press conference or business convention, fair or
exhibition;
(iii) Being the expenditure on sponsorship of any
sports event or any other event organised by any
Government agency or trade association or body;
(iv) Being the expenditure on the publication in
any print or electronic media of any notice required to be published by, under
any law, or by an order of a court or tribunal;
(v) being the expenditure on advertisement by way of signs, art
work, painting, banners, awnings, direct mail, electric spectaculars, kiosks,
hoardings, bill boards 7[J10] [, display of
products] or by way of such other medium of advertisement; 8[J11] [* * *]
(vi) Being
the expenditure by way of payment to any advertising agency for the purposes of
clauses (i) to (v) above;
9[J12] [10[J13] [(vii) being the expenditure on distribution of
samples either free of cost or at concessional rate;
and]]
(viii) Being the expenditure by way of payment to
any person of repute for promoting the sale of goods or services of the
business of the employer,]
Shall not be considered as
expenditure on sales promotion including publicity;
(E) Employees' welfare.
Explanation.—For the purposes of this clause, any expenditure incurred
or payment made to fulfill any statutory obligation or mitigate occupational
hazards or provide first aid facilities in the hospital or dispensary run by
the employer shall not be considered as expenditure for employees' welfare;
The following Explanation is
being substituted for the above italicised
Explanation by the Finance Act, 2008, w.e.f.
1-4-2009:
"Explanation.—for the purposes of this clause, any expenditure incurred
or payment made to—
(i)
Fulfill any statutory obligation; or
(ii) Mitigate occupational hazards; or
(iii) Provide first aid facilities in the hospital
or dispensary run by the employer; or
(iv) Provide crèche facility for the children of the employee; or
(v) Sponsor a sportsman, being an employee; or
(vi) Organise sports events for employees,
Shall not be considered as
expenditure for employees' welfare;"
(F) Conveyance 11[J14] [* * *];
(G) Use of hotel, boarding and lodging facilities;
(H) Repair, running (including fuel), maintenance of motorcars and
the amount of depreciation thereon;
(I) Repair, running (including fuel), maintenance of aircrafts and
the amount of depreciation thereon;
(J) Use of telephone (including mobile phone) other than expenditure
on leased telephone lines;
12[J15] [(K) maintenance of any accommodation in
the nature of guest house other than accommodation used for training purposes;]
(L) Festival celebrations;
(M) Use of health club and similar facilities;
(N) Use of any other club facilities;
(O) Gifts; and*
(P) Scholarships;
13[J16] [(Q) Tour and travel (including foreign
travel).]
(3) For the purposes of sub-section (1), the privilege, service,
facility or amenity does not include perquisites in respect of which tax is
paid or payable by the employee 14[J17] [or any benefit
or amenity in the nature of free or subsidized transport or any such allowance
provided by the employer to his employees for journeys by the employees from
their residence to the place of work or such place of work to the place of
residence].
115WC. Value of fringe benefits:-
(1) For the purpose of this Chapter, the value of fringe benefits
shall be the aggregate of the following, namely,—
(a) cost at which the benefits referred to in clause (b) of
sub-section (1) of section 115WB, is provided by the employer to the general
public as reduced by the amount, if any, paid by, or recovered from, his
employee or employees:
Provided that in a case where the expenses of the nature referred to
in clause (b) of sub-section (1) of section 115WB are included in any other
clause of sub-section (2) of the said section, the total expenses included
under such other clause shall be reduced by the amount of expenditure referred
to in the said clause (b) for computing the value of fringe benefits;
1[J18] [(b) the amount of contribution, referred
to in clause (c) of sub-section (1) of section 115WB, which exceeds one lakh rupees in respect of each employee;]
2[J19] [(ba) 3[J20] the fair market
value of the specified security or sweat equity shares referred to in clause
(d) of sub-section (1) of section 115WB, on the date on which the option vests
with the employee as reduced by the amount actually paid by, or recovered from,
the employee in respect of such security or shares.
Explanation.—for the purposes of this clause,—
(i)
"Fair market value" means
the value determined in accordance with the methods as may be prescribed by the
Board;
(ii) "Option" means a right but not an
obligation granted to an employee to apply for the specified security or sweat
equity shares at a pre-determined price;]
(c) twenty per cent of the expenses referred to in clauses (A) to 4[J21] [(K)] of
sub-section (2) of section 11
(d) fifty per cent of the expenses referred to in clauses 5[J22] [(L)] to (P) of
sub-section (2) of section 115WB;
6[J23] [(e) five per cent of the expenses
referred to in clause (Q) of sub-section (2) of section 115WB.]
(2) Notwithstanding anything contained in sub-section (1),—
(a) in the case of an employer engaged in the business of hotel, the
value of fringe benefits for the purposes referred to in clause (B) of
sub-section (2) of section 115WB shall be "five per cent" instead of
"twenty per cent" referred to in clause (c) of sub-section (1);
7[J24] [(aa) in the case of an employer engaged in the business of
carriage of passengers or goods by aircraft, the value of fringe benefits for
the purposes referred to in clause (B) of sub-section (2) of section 115WB
shall be "five per cent" instead of "twenty per cent"
referred to in clause (c) of sub-section (1);
(ab)
in the case of an employer engaged in
the business of carriage of passengers or goods by ship, the value of fringe
benefits for the purposes referred to in clause (B) of sub-section (2) of
section 115WB shall be "five per cent" instead of "twenty per
cent" referred to in clause (c) of sub-section (1);]
(b) in the case of an employer engaged in the business of
construction, the value of fringe benefits for the purposes referred to in
clause (F) of sub-section (2) of section 115WB shall be "five per
cent" instead of "twenty per cent" referred to in clause (c) of
sub-section (1);
(c) in the case of an employer engaged in the business of
manufacture or production of pharmaceuticals, the value of fringe benefits for
the purposes referred to in clauses (F) and (G) of sub-section (2) of section
115WB shall be "five per cent" instead of "twenty per cent"
referred to in clause (c) of sub-section (1);
(d) in the case of an employer engaged in the business of
manufacture or production of computer software, the value of fringe benefits
for the purposes referred to in clauses (F) and (G) of sub-section (2) of
section 115WB shall be "five per cent" instead of "twenty per
cent" referred to in clause (c) of sub-section (1);
8[J25] [(da) in the
case of an employer engaged in the business of carriage of passengers or goods
by aircraft, the value of fringe benefits for the purposes referred to in
clause (G) of sub-section (2) of section 115WB shall be "five per
cent" instead of "twenty per cent" referred to in clause (c) of
sub-section (1);
(db) in the case of an employer engaged in the
business of carriage of passengers or goods by ship, the value of fringe
benefits for the purposes referred to in clause (G) of sub-section (2) of
section 115WB shall be "five per cent" instead of "twenty per
cent" referred to in clause (c) of sub-section (1);]
(e) in the case of an employer engaged in the business of carriage
of passengers or goods by motorcar, the value of fringe benefits for the
purposes referred to in clause (h) of sub-section (2) of section 115WB shall be
"five per cent" instead of "twenty per cent" referred to in
clause (c) of sub-section (1);
(f) In the case of an employer engaged in the business of carriage
of passengers or goods by aircraft, the value of fringe benefits for the
purposes referred to in clause (1) of sub-section (2) of section 115WB shall be
taken as Nil.
C.—Procedure
for filing of return in respect of fringe benefits, assessment and payment of
tax in respect thereof
115WD. Return of fringe benefits:-
(1) Without prejudice to the provisions contained in section 139,
every employer who during a previous year has paid or made provision for
payment of fringe benefits to his employees, shall, on or before the due date,
furnish or cause to be furnished a return of fringe benefits to the Assessing
Officer in the prescribed form1[J26] and verified in the prescribed manner and setting forth
such other particulars as may be prescribed, in respect of the previous year.
Explanation.—In this sub-section, "due
date" means,—
(a) Where the employer is—
(i)
A company; or
(ii) A person (other than a company) whose
accounts are required to be audited under this Act or under any other law for
the time being in force, the 2[J27] [30th day of
September] of the assessment year;
(b) In the case of any other employer, the 31st day of July of the
assessment year.
(2) In the case of any employer who, in the opinion of the
Assessing Officer, is responsible for paying fringe benefit tax under this Act
and who has not furnished a return under sub-section (1), the Assessing Officer
may, after the due date, issue a notice to him and serve the same upon him,
requiring him to furnish within thirty days from the date of service of the
notice, the return in the prescribed form and verified in the prescribed manner
and setting forth such other particulars as may be prescribed.
(3) Any employer responsible for paying fringe benefit tax who has
not furnished a return within the time allowed under sub-section (1) or within
the time allowed under a notice issued under sub-section (2), may furnish the
return for any previous year, at any time before the expiry of one year from
the end of the relevant assessment year or before the completion of the
assessment, whichever is earlier.
(4) If any employer, having furnished a return under sub-section
(1), or in pursuance of a notice issued under sub-section (2), discovers any
omission or any wrong statement therein, he may furnish a revised return at any
time before the expiry of one year from the end of the relevant assessment year
or before the completion of the assessment, whichever is earlier.
1[J28] [(1) Where a
return has been made under section 115WD, such return shall be processed in the
following manner, namely:—
(a) The value of fringe benefits shall be computed after making the
following adjustments, namely:—
(i)
Any arithmetical error in the return; or
(ii) An incorrect claim, if such incorrect claim is
apparent from any information in the return;
(b) The tax and interest, if any, shall be computed on the basis of the
value of fringe benefits computed under clause (a);
(c) the sum payable by, or the amount of refund due to, the assessee
shall be determined after adjustment of the tax and interest, if any, computed
under clause (b) by any advance tax paid, any tax paid on self-assessment and
any amount paid otherwise by way of tax or interest;
(d) an intimation shall be prepared or generated and sent to the
assessee specifying the sum determined to be payable by, or the amount of
refund due to, the assessee under clause (c); and
(e) The amount of refund due to the assessee in pursuance of the
determination under clause (c) shall be granted to the assessee:
Provided that no intimation under this sub-section shall be sent
after the expiry of one year from the end of the financial year in which the
return is made.
Explanation.—For the purposes of this
sub-section,—
(a) "An incorrect claim apparent from any information in the
return" shall mean a claim, on the basis of an entry, in the return,
(i)
Of an item, which
is inconsistent with another entry of the same or some other item in such
return;
(ii) In respect of which the information
required to be furnished to substantiate such entry has not been so furnished
under this Act; or
(iii) In respect of a deduction or value of fringe
benefits, where such deduction or value exceeds specified statutory limit which
may have been expressed as monetary amount or percentage or ratio or fraction;
(b) The acknowledgment of the return shall be deemed to be the
intimation in a case where no sum is payable by, or refundable to, the assessee
under clause (c), and where no adjustment has been made under clause (a).
(1A) For the purposes of processing of returns
under sub-section (1), the Board may make a scheme for centralized processing
of returns with a view to expeditiously determining the tax payable by, or the
refund due to, the assessee as required under that sub-section.
(1B) Save as otherwise expressly provided, for
the purpose of giving effect to the scheme made under sub-section (1A), the
Central Government may, by notification in the Official Gazette, direct that
any of the provisions of this Act relating to processing of returns shall not
apply or shall apply with such exceptions, modifications and adaptations as may
be specified in that notification; so, however, that no direction shall be
issued after the 31st day of March, 2009.
(1C) Every notification
issued under sub-section (1B), along with the scheme made under sub-section
(1A), shall, as soon as may be after the notification is issued, be laid before
each House of Parliament.]
(2) Where a return has been furnished under section 115WD, the
Assessing Officer shall, if he considers it necessary or expedient to ensure
that the assessee has not understated the value of fringe benefits or has not
underpaid the tax in any manner, serve on the assessee a notice requiring him
on a date to be specified therein, either to attend his office or to produce,
or cause to be produced, any evidence on which the assessee may rely in support
of the return:
Provided that no notice under this sub-section
shall be served on the assessee after the expiry of 2[J29] [six months from
the end of the financial year] in which the return is furnished.
(3) On the day specified in the notice issued under sub-section
(2), or as soon afterwards as may be, after hearing such evidence as the
assessee may produce and such other evidence as the Assessing Officer may
require on specified points, and after taking into account all relevant
material which he has gathered, the Assessing Officer shall, by an order in
writing, make an assessment of the value of the fringe benefits paid or payable
by the assessee, and determine the sum payable by him or refund of any amount
due to him on the basis of such assessment.
(4) Where a regular assessment under sub-section (3) or section
115WF is made,—
(a) Any tax or interest paid by the assessee under sub-section (1)
shall be deemed to have been paid towards such regular assessment;
(b) If no refund is due on regular assessment or the amount refunded
under sub-section (1) exceeds the amount refundable on regular assessment, the
whole or the excess amount so refunded shall be deemed to be tax payable by the
assessee and the provisions of this Act shall apply accordingly.
115WF. Best judgment assessment:-
(1) If any person, being an employer—
(a) fails to make the return required under sub-section (1) of section
115WD and has not made a return under sub-section (3) or a revised return under
sub-section (4) of that section, or
(b) fails to comply with all the terms of a notice issued under
sub-section (2) of section 115WD or fails to comply with a direction issued
under sub-section (2A) of section 142, or
(c) Having made a return, fails to comply with all the terms of a notice
issued under sub-section (2) of section 115WE, the Assessing Officer, after
taking into account all relevant material which the Assessing Officer has
gathered, shall, after giving the assessee an opportunity of being heard, make
the assessment of the fringe benefits to the best of his judgment and determine
the sum payable by the assessee on the basis of such assessment:
Provided that such opportunity shall be given by the
Assessing Officer by serving a notice calling upon the assessee to show cause,
on a date and time to be specified in the notice as to why the assessment
should not be completed to the best of his judgment:
Provided further that it shall not be necessary to give
such opportunity in a case where a notice under sub-section (2) of section
115WD has been issued prior to the making of an assessment under this section.
115WG. Fringe benefits escaping assessment:-
If the Assessing Officer has
reason to believe that any fringe benefits chargeable to tax have escaped
assessment for any assessment year, he may, subject to the provisions of
sections 115WH, 150 and 153, assess or reassess such fringe benefits and also
any other fringe benefits chargeable to tax which have escaped assessment and
which come to his notice subsequently in the course of the proceedings under
this section, for the assessment year concerned (hereafter referred to as the
relevant assessment year).
Explanation.—For the purposes of this section, the following shall also
be deemed to be cases where fringe benefits chargeable to tax have escaped
assessment, namely:—
(a) Where no return of fringe benefits has been furnished by the
assessee;
(b) Where a return of fringe benefits has been furnished by the
assessee but no assessment has been made and it is noticed by the Assessing
Officer that the assessee has understated the value of fringe benefits in the
return;
(c) Where an assessment has been made, but the fringe benefits
chargeable to tax have been under-assessed.
115WH. Issue of notice where fringe benefits have escaped
assessment:-
(1) Before making the assessment or reassessment under section
115WG, the Assessing Officer shall serve on the assessee a notice requiring him
to furnish within such period as may be specified in the notice, a return of
the fringe benefits in respect of which he is assessable under this Chapter
during the previous year corresponding to the relevant assessment year, in the
prescribed form and verified in the prescribed manner and setting forth such
other particulars as may be prescribed, and the provisions of this Chapter shall,
so far as may be, apply accordingly as if such return were a return required to
be furnished under section 115WD.
(2) The Assessing Officer shall, before issuing any notice under
this section, record his reasons for doing so.
(3) No notice under sub-section (1) shall be issued for the
relevant assessment year after the expiry of six years from the end of the
relevant assessment year.
Explanation.—In
determining fringe benefits chargeable to tax which have escaped assessment for
the purposes of this sub-section, the provisions of the Explanation to section
115WG shall apply as they apply for the purposes of that section.
(4) In a case where an assessment under sub-section (3) of section
115WE or section 115WG has been made for the relevant assessment year, no
notice shall be issued under sub-section (1) by an Assessing Officer, after the
expiry of four years from the end of the relevant assessment year, unless the
Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the
Assessing Officer, that it is a fit case for the issue of such notice.
115WI. Payment of fringe benefit tax:-
Notwithstanding that the regular
assessment in respect of any fringe benefits is to be made in a later
assessment year, the tax on such fringe benefits shall be payable in advance
during any financial year, in accordance with the provisions of section 115WJ,
in respect of the fringe benefits which would be chargeable to tax for the
assessment year immediately following that financial year, such fringe benefits
being hereafter in this Chapter referred to as the "current fringe
benefits".
115WJ. Advance tax in respect of fringe benefits:-
(1) Every assessee who is liable to pay advance tax under section 115WI, shall on his own accord, pay advance tax on his
current fringe benefits calculated in the manner laid down in sub-section (2).
1[J30] [(2) Advance tax on the current fringe
benefits shall be payable by—
(a) all the companies, who are liable to pay the same, in four
installments during each financial year and the due date of each installment
and the amount of such installment shall be as specified in Table I below:
Table I
|
Due date of installment |
Amount payable |
|
On or before the 15th June |
Not less than fifteen per cent of such advance tax. |
|
On or before the 15th September |
Not less than forty-five per cent of such advance tax as reduced by the amount, if any, paid in the earlier installment. |
|
On or before the 15th December |
Not less than seventy-five per cent of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments. |
|
On or before the 15th March |
The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments; |
(b) all the assesses (other than companies), who are liable to pay the same, in three installments during each financial year and the due date of each installment and the amount of such installment shall be as specified in Table II below:
Table II
|
Due date of installment |
Amount payable |
|
On or before the 15th September |
Not less than thirty per cent of such advance tax. |
|
On or before the 15th December |
Not less than sixty per cent of such advance tax as reduced by the amount, if any, paid in the earlier installment. |
|
On or before the 15th March |
The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments. |
(3) Where an assessee, being a company, has failed to pay the advance tax payable by him on or before the due date for any installment or where the advance tax paid by him is less than the amount payable by the due date, he shall be liable to pay simple interest calculated at the rate of—
(i) one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th June of the financial year falls short of fifteen per cent of the advance tax payable;
(ii) one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th September of the financial year falls short of forty-five per cent of the advance tax payable;
(iii) one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th December of the financial year falls short of seventy-five per cent of the advance tax payable; and
(iv) one per cent on an amount by which the advance tax paid on or before the 15th March of the financial year falls short of the hundred per cent of the advance tax payable.
(4) Where an assessee, being a person other than a company, has failed to pay the advance tax payable by him on or before the due date for any installment or where the advance tax paid by him is less than the amount payable by the due date, he shall be liable to pay simple interest calculated at the rate of—
(i) one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th September of the financial year falls short of thirty per cent of the advance tax payable;
(ii) one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th December of the financial year falls short of sixty per cent of the advance tax payable; and
(iii) one per cent on an amount by which the advance tax paid on or before the 15th March of the financial year falls short of hundred per cent of the advance tax payable.
(5) Where an assessee has failed to pay the advance tax payable by him during a financial year or where the advance tax paid by him is less than ninety per cent of the tax assessed under section 115WE or section 115WF or section 115WG, the assessee shall be liable to pay simple interest at the rate of one per cent per month, for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of assessment of tax under section 115WE or section 115WF or section 115WG.]
115WK. Interest for default in furnishing return of fringe
benefits:-
(1) Where the return of fringe benefits for any assessment year
under sub-section (1) or sub-section (3) of section 115WD or in response to a
notice under sub-section (2) of that section, is furnished after the due date,
or is not furnished, the employer shall be liable to pay simple interest at the
rate of one per cent for every month or part of a month comprised in the period
commencing on the date immediately following the due date, and,—
(a) Where the return is furnished after the due date, ending on the
date of furnishing of the return; or
(b) Where no return has been furnished, ending on the date of
completion of the assessment under section 115WF, on the amount of the tax on
the value of fringe benefits as determined under sub-section (1) of section
115WE or regular assessment as reduced by the advance tax paid under section
115WJ.
Explanation 1.—In this section, "due
date" means the date specified in the Explanation to sub-section (1) of
section 115WD as applicable in the case of the employer.
Explanation 2.—Where, in relation to an assessment year, an assessment is
made for the first time under section 115WG, the assessment so made shall be
regarded as a regular assessment for the purposes of this section.
(2) The provisions contained in sub-section (2) to sub-section (4)
of section 234A shall, so far as may be, apply to this section.
1[J31] [115WKA.
Recovery of fringe benefit tax by the employer from the employee:-
Notwithstanding anything
contained in any agreement or scheme under which any specified security or
sweat equity shares referred to in clause (d) of sub-section (1) of section
115WB has been allotted or transferred, directly or indirectly, by the employer
on or after the 1st day of April, 2007, it shall be lawful for the employer to
vary the agreement or scheme under which such specified security or sweat
equity shares has been allotted or transferred so as to recover from the
employee the fringe benefit tax to the extent to which such employer is liable
to pay the fringe benefit tax in relation to the value of fringe benefits
provided to the employee and determined under clause (ba)
of sub-section (1) of section 115WC.]
1[J32] [115WKB. Deemed payment of tax by employee:-
(1) Where an employer has paid any fringe benefit tax with respect
to allotment or transfer of specified security or sweat equity shares, referred
to in clause (d) of sub-section (1) of section 115WB, and has recovered such
tax subsequently from an employee, it shall be deemed that the fringe benefit
tax so recovered is the tax paid by such employee in relation to the value of
the fringe benefit provided to him only to the extent to which the amount
thereof relates to the value of the fringe benefit provided to such employee,
as determined under clause (ba) of sub-section (1) of
section 115WC.
(2) Notwithstanding anything contained in any other provisions of
this Act, where the fringe benefit tax recovered from the employee is deemed to
be the tax paid by such employee under sub-section (1), such employee shall,
under this Act, not be entitled to claim—
(i)
Any refund out of such payment of tax;
or
(ii) Any credit of such payment of tax against tax
liability on other income or against any other tax liability.]
115WL. Application of other provisions of this Act:-
Save as otherwise provided in
this Chapter, all other provisions of this Act shall, as far as may be, apply
in relation to fringe benefits also.]
[J1]Chapter XIIH, comprising of sections 115W to 115WL, inserted by the Finance Act, 2005, w.e.f. 1-4-2006. See Circular No. 9/2007, dated 20-12-2007.
[J2]Substituted by the Taxation Laws
(Amendment) Act, 2005, w.e.f. 1-4-2006. Prior to the
substitution, sub-clause (iii), as originally enacted, read as under:
"(iii) an association of persons or a body of individuals, whether incorporated or not, but excluding any fund or trust or institution eligible for exemption under clause (23C) of section 10 or registered under section 12AA;"
[J3]Inserted by the Taxation Laws (Amendment) Act, 2005, w.e.f. 1-4-2006.
[J4]The word "and" omitted by the Finance Act, 2007, w.e.f. 1-4-2008.
[J5]Inserted by the Finance Act, 2007, w.e.f. 1-4-2008.
[J6]Inserted by the Finance Act, 2007, w.e.f. 1-4-2008.
[J8]Substituted for "and includes employees' stock option" by the Finance Act, 2008, w.e.f. 1-4-2008.
[J9]Being inserted by the Finance Act, 2008, w.e.f. 1-4-2009.
[J10]Inserted by the Finance Act, 2007, w.e.f. 1-4-2008.
[J11]The word "and" omitted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J12]Clauses (vii) and (viii) inserted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J13]Substituted for clause (vii) by the Finance
Act, 2007, w.e.f. 1-4-2008. Prior to
the substitution, clause (vii) read as under:
"(vii) Being the expenditure on distribution of free samples of medicines or of medical equipment, to doctors; and"
[J14]The words ", tour and travel (including foreign travel)" omitted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J15]Being omitted by the Finance Act, 2008, w.e.f. 1-4-2009.
* The word "and" should be deleted here.
[J16]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J17]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J18]Substituted by the Finance Act, 2006, w.e.f. 1-4-2007. Prior to the substitution, clause (b), as
originally enacted, read as under:
"(b) actual amount of contribution referred to in clause (c) of sub-section (1) of section 115WB;"
[J19]Inserted by the Finance Act, 2007, w.e.f. 1-4-2008.
[J20]See rules 40C and 40D.
[J21]Being substituted by "(L)" by the Finance Act, 2008, w.e.f. 1-4-2009.
[J22]Being substituted by "(M)" by the Finance Act, 2008, w.e.f. 1-4-2009.
[J23]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J24]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J25]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.
[J26]See rule 12(1) and Form Nos. ITR 5, 6, 7 and 8.
[J27]Substituted for "31st day of October" by the Finance Act, 2008, w.e.f. 1-4-2008.
[J28]Substituted by the Finance Act, 2008, w.e.f. 1-4-2008. Prior to the substitution,
sub-section (1), as originally enacted, read as under:
"(1)
Where a return has been made under section 115WD,—
(i) if any tax or interest is found due on the basis of such
return, after adjustment of any advance tax paid, any tax paid on
self-assessment and any amount paid otherwise by way of tax or interest, then
without prejudice to the provisions of sub-section (2), an intimation shall be
sent to the assessee specifying the sum so payable, and such intimation shall
be deemed to be a notice of demand issued under section 156 and all the
provisions of this Act shall apply accordingly; and
(ii) if any refund is due on the basis of such return, it shall
be granted to the assessee and an intimation to this effect shall be sent to the
assessee:
Provided
that except as otherwise provided in this sub-section, the acknowledgment of
the return shall be deemed to be an intimation under this sub-section where
either no sum is payable by the assessee or no refund is due to him:
Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made."
[J29]Substituted for "twelve months from the end of the month" by the Finance Act, 2008, w.e.f. 1-4-2008.
[J30]Substituted by the Finance Act, 2007, w.e.f. 1-6-2007. Prior to the substitution, sub-sections
(2) and (3), as originally enacted, read as under:
"(2) The amount of
advance tax payable by an assessee in the financial year shall be thirty per
cent of the value of the fringe benefits referred to in section 115WC, paid or
payable in each quarter and shall be payable on or before the 15th day of the
month following such quarter:
Provided that the
advance tax payable for the quarter ending on the 31st day of March of the
financial year shall be payable on or before the 15th day of March of the said
financial year.
(3) Where an assessee has failed to pay the advance tax for any quarter or where the advance tax paid by him is less than thirty per cent of the value of fringe benefits paid or payable in that quarter, he shall be liable to pay simple interest at the rate of one per cent on the amount by which the advance tax paid falls short of, thirty per cent of the value of fringe benefits for any quarter, for every month or part of the month for which the shortfall continues."
[J31]Inserted by the Finance Act, 2007, w.e.f. 1-4-2007.
[J32]Inserted by the Finance Act, 2008, w.e.f. 1-4-2008.