FBT norms likely to be eased in Budget '06-07
The fringe benefit tax (FBA) law may get simpler and easier on corporates. Revenue secretary KM Chandrashekar on Thursday said the finance ministry would address the concerns of the industry during the budget exercise.
By TNN |
DELHI: The fringe benefit tax (FBA) law may get simpler and easier on corporates. Revenue secretary KM Chandrashekar on Thursday said the finance ministry would address the concerns of the industry during the budget exercise. He has also promised a new scheme for deduction on research and development expenditure.
He added along with rationalisation of the tax structure, the finance ministry would need to broaden the tax base as well as increase revenue mobilisation.
���The complexity of the structure of FBT seems to be the most worrisome feature. We will certainly try to take the concerns aboard and see what can be done during the budget exercise,��� he said at conference on international tax organised here by Ficci.
FBT was introduced in Budget for ���05-06 and the levy has so far yielded Rs 1,700 crore in revenues for the Centre. The levy is a presumptive tax where it is presumed that a portion of expenditure incurred by companies and other employers under certain heads have been spent on employees. Currently, 20-50% such expenditure is taxed at the rate of 30%. These include expenses on sales promotion, transportation, leave travel and medical allowance.
The revenue secretary said the department had tried to address some of the concerns of the industry through an explanatory circular issued in September ���05. ���We are still open to suggestions and simplification,��� he added.
Some chambers of trade and commerce want the government to scrap the tax altogether. A scrapping of the tax is unlikely, at least in the next Budget.
Mr Chandrasekhar has also said that the revenue department, in consultation with department of science and technology, would rework the two schemes for expenditure on research and development-weighted deduction scheme and specific deduction-to bring a proposal that would ensure more focused and fruitful expenditure in R&D.
A committee has been constituted under the chairmanship of eminent scientist RA Mashelkar to recommend an appropriate scheme.
He added along with rationalisation of the tax structure, the finance ministry would need to broaden the tax base as well as increase revenue mobilisation.
���The complexity of the structure of FBT seems to be the most worrisome feature. We will certainly try to take the concerns aboard and see what can be done during the budget exercise,��� he said at conference on international tax organised here by Ficci.
FBT was introduced in Budget for ���05-06 and the levy has so far yielded Rs 1,700 crore in revenues for the Centre. The levy is a presumptive tax where it is presumed that a portion of expenditure incurred by companies and other employers under certain heads have been spent on employees. Currently, 20-50% such expenditure is taxed at the rate of 30%. These include expenses on sales promotion, transportation, leave travel and medical allowance.
The revenue secretary said the department had tried to address some of the concerns of the industry through an explanatory circular issued in September ���05. ���We are still open to suggestions and simplification,��� he added.
Some chambers of trade and commerce want the government to scrap the tax altogether. A scrapping of the tax is unlikely, at least in the next Budget.
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Mr Chandrasekhar has also said that the revenue department, in consultation with department of science and technology, would rework the two schemes for expenditure on research and development-weighted deduction scheme and specific deduction-to bring a proposal that would ensure more focused and fruitful expenditure in R&D.
A committee has been constituted under the chairmanship of eminent scientist RA Mashelkar to recommend an appropriate scheme.
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