Fringe Benefits

Fringe benefits (perks) include most benefits given to employees in

addition to their salary or wages. A collection of various benefits provided
by an employer, which are exempt from taxation as long as certain
conditions are met. Some fringe benefits are regarded part of a taxable
income.

Fringe benefits commonly include health insurance, group term life

coverage, education reimbursement, childcare and assistance
reimbursement, cafeteria plans, employee discounts, personal use of a
company owned vehicle and other similar benefits.
What is fringe benefit tax?
Fringe benefit tax (FBT) is a tax on benefits that employees receive and enjoy as a result of their
employment. FBT replaces the PAYE tax that would be deducted from the employee if the
employee was given the money to purchase the benefit as part of salary or wages instead of the
actual benefit.
The fringe benefits tax (FBT) was the tax applied to most, although not all, fringe benefits in
India. A new tax was imposed on employers by India's Finance Act 2005 was introduced for the
financial year commencing April 1, 2005.[1] The fringe benefit tax was temporarily suspended in
the 2009 Union budget of India by Finance Minister Pranab Mukherjee.[2]
The following items were covered under FBT:

Employer's expenses on entertainment, travel, employee welfare and accommodation.

The definition of fringe benefits that have become taxable has been significantly
extended. The law provides an exact list of taxable items.
Employer's provision of employee transportation to work or a cash allowances for this
purpose.

Employer's contributions to an approved retirement plan (called a superannuation

fund).

Employee stock option plans (ESOPs) have also been brought under fringe benefits tax
from the fiscal year 200708.