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    Jan 29, 2010

    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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