As usual salaried employees will bear the brunt and corporates and Business houses can manipulate books and get away.We may see voucher payments spree in IT.
NEW DELHI: Salaried employees may burn a hole in their pockets with the government all set to impose tax on all perks –residential
accommodation, conveyance and others — paid for by the company, under a new law that replaces the already abolished Fringe Benefit Tax.
Perquisites given by the employer such as residential accommodation, conveyance facility and other benefits to the family of the employee could soon be added to their salary for income tax purposes and the Government may come out with a notification soon on the valuation of these perks.
Earlier, the tax on these perks were paid by the employer in the form of the Fringe Benefit Tax (FBT) that was done away with in the Budget 2009-10 by finance minister Pranab Mukherjee.
The perquisites to be included in the taxable salary include residential accommodation given by the employer, expenses on motor car for official or personal use, salaries of the driver, gardener and even sweeper if paid by the employer and concessional education provided to the employee’s children.
“Under the FBT regime, tax burden of the perquisites was on the employer, but will now be on the employee,” said Ernst & Young tax partner Amitabh Singh when asked about the new income tax valuation rules.
The valuation rules, yet to be officially announced by the finance ministry, are likely to be applicable with retrospective effect from April 1 this year.
http://timesofindia.indiatimes.com/biz/india-business/Tax-on-perks-to-be-effective-from-April-2009/articleshow/5358095.cms
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