1. "Fringe Benefit Tax" (FBT) is payable at the rate of 30% of the value of fringe benefits (plus surcharge and education cess and Secondary and higher education cess) provided or deemed to have been provided by an employer to his employees. FBT shall be charged in addition to the income-tax charged for every assessment year and shall be payable by the employer even if no income-tax is payable by the employer under other provisions of the Income-tax Act.

2. The term "employer" for the purpose of taxation of fringe benefits is defined in section 115W(a) to mean:

i. a company;

ii. a firm;

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."

However, 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;

3. "Fringe Benefit has been defined to mean any consideration for employment provided by way of –

1. 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);

2. any free or concessional ticket provided by the employer for private journeys of his employees or their family members;

3. any contribution by the employer to an approved superannuation fund for employees;

4. 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)

The privilege, service, facility or amenity does not include perquisite in respect of which tax is to be paid or payable by the employee 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 employees from residence to the place of work or such place of the work to the place of residence shall not form part of fringe benefits."

4. FBT is payable on the value of fringe benefits provided or deemed to have been provided as under:

Sr.No.	Nature of expenses incurred by the employer	Exclusions	Value of Fringe Benefits
I	Any free or concessional ticket provided by the employer for private journeys of his employees or their family members.	Perquisites in respect of which tax is paid or payable by the employee	Cost at which provided to general public less amount if any recovered from employee
II	Any contribution by the employer to an approved superannuation fund for employees.	Perquisites in respect of which tax is paid or payable by the employee	Actual amount of contribution in excess of Rs. 100,000/- per Employee
III	Any specified security or sweat equity shares allotted or transferred directly or indirectly, by the employer to employee free of cost or at concessional rate.		The fair market value of the specified security or sweat equity shares on the  date of exercise of option by the employee as reduced by the amount actually paid by or recovered from employee.
Deemed Fringe Benefits:
A.	Entertainment.		20% of expenditure
B.	Provision for 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.	a. any expenditure on, or payment for, food or beverages provided by the employer to his employees in office or factory; b. any expenditure on or payment through paid vouchers which are not transferable and usable only at eating joints or outlets; c. any expenditure or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets.	20% of expenditure. 5% in case of employer engaged in hotel business and employer engaged in the business of carriage of passengers or goods by aircraft or ships.
C.	Conference. Any expenditure on conveyance, tour and travel (including foreign travel), or hotel, or boarding and lodging in connection with any conference shall be deemed to be expenditure incurred for the purposes of conference.	Fee for participation of employees	20% of expenditure
D.	Sales promotion including publicity.	Expenditure on advertisement – a. 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; 20% of expenditure b. being the expenditure on the holding of, or the participation in, any press conference or business convention, fair or exhibition; c. being the expenditure on sponsorship of any sports event or any other event organised by any Government agency or trade association or body; d. being the expenditure on the publication in any print or electronic media of any notice required to be published by or under any law or by an order of a court or Tribunal; e. being the expenditure on advertisement by way of signs, art work, painting, banners, awnings, direct mail, electric spectaculars, kiosks, hoardings, bill boards, display of products or by way of such other medium of advertisement; and f. being the expenditure by way of payment to any advertising agency for the purpose of clauses (a) to (e) above g. being expenditure incurred on distribution of free samples of medicines or medical equipments to doctors up to assessment year 2007-08. From assessment year 2008-09, expenditure on distribution of samples either free of cost or at concessional rate; h. being expenditure by way of payment to any person of repute for promoting the sale of goods or services.	20% of expenditure
E.	Employees’ welfare.	Any expenditure incurred or payment made to a. fulfil any statutory obligation; or b. mitigate occupational hazards; or c. provide first aid facilities in the hospital or dispensary run by the employer; or d. provide crèche facility for the children of the employee; or e. sponsor a sportsman, being an employee; or f. organize sports events for employees.	20% of expenditure
F.	Conveyance.		20% of expenditure 5% in case of employer engaged in the business of manufacture or production of pharmaceuticals/ computer software and in construction business.
G.	Use of hotel, boarding and lodging facilities.		20% of expenditure. 5% in case of employer engaged in the business of manufacture or production of pharmaceuticals/ computer software and employer engaged in the business of carriage of passenger or goods by aircrafts or ships
H.	Repair, running (including fuel), maintenance of motorcars and the amount of depreciation thereon		20% of expenditure. 5% in case of employer engaged in the business of carriage of passengers or goods by motorcar.
I.	Repair, running (including fuel) and maintenance of aircrafts and the amount of depreciation		20% of expenditure. Nil in case of employer thereon. engaged in the business of carriage of passengers or goods by aircraft.
J.	Use of telephone (including mobile phone).	Expenditure on leased telephone lines	20% of expenditure
K.	Maintenance of any accommodation in the nature of guest house.	Omitted w.e.f. Assessment Year 2009-10.	20% of expenditure
L.	Festival celebrations.		50% of expenditure w.e.f. Assessment Year 2009-10 20% of such expenditure.
M.	Use of health club and similar facilities.		50% of expenditure
N.	Use of any other club facilities.		50% of expenditure
O.	Gifts.		50% of expenditure
P.	Scholarships.		50% of expenditure
Q.	Tour and travel (including foreign travel).		5% of expenditure

5. As per section 115WD, the due date for furnishing the return of fringe benefits is 30th September in the case of a company and a person (other than a company) whose accounts are required to be audited under the Income-tax Act or under any other law; and 31st July in the case of any other employer.

6. An employer may file a belated return/revised return of fringe benefits any time before the expiry of one year from the end of the relevant assessment year or before completion of assessment, whichever is earlier.

7. The procedures for issue of intimation, assessment of the fringe benefit tax return, making a best judgment assessment and re-opening and reassessment of the fringe benefit tax return, claim for refund, appeal to the Commissioner of Income-tax (Appeals), levy of penalty under section 271, prosecution for non-filing of return and abetment of false return are similar to the provisions relating to return of income.

8. Advance tax on current fringe benefits in case of all assessees to be paid on the same lines as advance tax payable on income of such assessees.

9. If no advance tax is paid in any quarter or advance tax paid is less than the amount payable by the due date, assessee shall be liable to pay simple interest at the rate of 1% per month for 3 months for first three quarters in the case of a company and for 3 months for first two quarters in case of any other assessee and 1% for the last quarter in respect of all assessees on the shortfall of payment of advance tax is payable.

10. If the return of fringe benefit is furnished after the due date or is not furnished, interest at the rate of 1% for every month or part of a month is leviable from the date immediately following the due date up to the date of furnishing the return or if no return is furnished, up to the date of completion of assessment.

11. As per section 271FB, if the return of fringe benefits is not furnished within the prescribed time, the Assessing Officer may levy a penalty of one hundred rupees per day till the failure continues.

12. Section 115WL provides that except for the provisions specifically contained in Chapter XII-H, all other provisions of the Income-tax Act shall apply to fringe benefits also.

13. No deduction shall be available in respect of fringe benefit tax paid while computing income under the head ‘Profits and gains of business or profession’.

14. The scheme of prima facie adjustments as described under Income Tax provisions also applicable for fringe benefit tax returns.