ADJUSTMENTS OF ADVANCE TAX IN RESPECT OF FRINGE BENEFITS FOR ASSESSMENT YEAR 2010-11

CIRCULAR NO. 2/2010.
Dated 29/01/2010
F. N0.385/05/2010-IT (B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Sub: Adjustment of “Advance Tax in respect of Fringe Benefits” for
Assessment Year 2010-11 against “Advance Tax” – matter regarding.
……….
The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT)
on the value of certain fringe benefits as contained in Chapter XII H (Sections 115
W to 115 WL) of Income Tax Act, 1961. By the Finance (No. 2) Act, 2009 a new
Section 115 WM was inserted to abolish the FBT with effect from Assessment
Year (A.Y.) 2010-11. Consequently, benefits given to employees are taxed as
perquisites in the hands of employees in terms of amendments to Clause 2 of
Section 17 of Income Tax Act, 1961. However, during the current Financial Year
2009-10 some assessees have paid “advance tax in respect of fringe benefits” for
Assessment Year 2010-11. In such cases the Board has decided that any
installment of “advance tax paid in respect of fringe benefits” for A.Y. 2010-11
shall be treated as Advance Tax paid by assessee concerned for A.Y. 2010-11.
The assessee can adjust such sum against its advance tax obligation in respect of
income for A.Y. 2010-11 or in case of loss etc claim such payment as refund as
advance tax paid in A.Y. 2010-11.

2. This circular may be brought to the notice of all officers in the field for
compliance.

(Ansuman Pattnaik)
Director (Budget)
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