The Hindu Business Line : `Rules on fringe benefit to leave little room for discretion'

THE Finance Ministry on Wednesday said that the guidelines for the implementation of the proposed fringe benefit tax would be "practicable" so as to leave little room for discretion at the hands of the income-tax assessing officers.

The Ministry also expressed willingness to review the base level of various expenses, including the contribution made by the employer to the approved superannuation fund, specified to be considered for the proposed fringe benefit tax.

Apprehending that many legitimate business expenditure may come within the ambit of fringe benefit tax, industry associations like Confederation of Indian Industry want to see the back of this tax.

"The idea of having rules for the implementation of the proposed fringe benefit tax is to minimise interpretation. The purpose of fringe benefit tax is to plug a loophole and not for taxing legitimate business expenditure," Mr K.M. Chandrasekhar, Revenue Secretary, told newspersons here.

He also highlighted that the Government does not expect to mop up "more than a fringe" from the proposed tax during the next fiscal,

Senior Finance Ministry officials also clarified that there was no intent to bring contribution made by the employer to recognised provident funds under the proposed fringe benefit tax. "We are only looking to bring the contributions made by the employer to the approved superannuation funds under the fringe benefit tax. It is in such contributions where there is usually an element of perquisite that goes with the expenditure," a senior Finance Ministry official said.

Dr Parthasarathi Shome, Advisor to Finance Minister, hinted that the Government was willing to review the base level for computation of the value of fringe benefits in respect of contribution made to superannuation funds. As per the Budget proposal, the actual amount of contribution made by the employer to the approved superannuation fund is to be considered for computation of the value of fringe benefits.

"We think that the proposed percentages are not exaggerated. But we are ready to take a deep and narrow look at each of them once again," he said.

As regards the proposed banking cash transaction tax, the Revenue Secretary maintained that this was not a "revenue raising" measure and no provisions have been made in the Budget towards this account.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
AI Express may also fly on domestic routes

Anomalies in fringe benefit tax will be removed: Govt

`Rules on fringe benefit to leave little room for discretion'

What's so BAD about the cash withdrawal tax?

Big block deal in ONGC shares valued at Rs 745 cr

.in domain latest victim of cybersquatting

European textile majors gung-ho on India