Pay tax for your club membership
Now, you’ll have to pay tax on club membership unless it is specified in your work contract that it is for official purpose
By Pradeep Thakur, TNN |
New Delhi: The government had announced in Budget 2009-10 that FBT on perks provided by employers would be abolished. Now, you’ll have to pay tax on club membership unless it is specified in your work contract that it is for official purpose.
The CBDT notification should have come just after the Budget to make it easy for employees to spread their tax outflow over the entire fiscal. However, it has come towards the end of the year, leaving just three months for the entire tax to be calculated and deducted at source. This is likely to result in employees having to suffer the pain of significantly lower take-homes for these months.
Calculating Fringe Benefits
Personal journey |
For employee or his/her family members at concessional rate or free of cost
Cost |
Value at which such benefit is offered by the employer to the public at large. The perquisite value shall be considered as Nil, in case employees of an airline or of railways.
Interest free/concessional loan for housing |
Cost |
Interest amount, as per the SBI rates on the loan
Expenses on travelling, touring, accommodation |
In respect to holiday trip availed by employee (excluding LTA)
Cost |
Actual amount of expenditure incurred or by such employer on that account
Free food & non-alcoholic beverages |
Cost |
Amount of expenditure incurred by the employer, except if employer provides free food and nonalcoholic beverages during the office hours at office premises or through paid vouchers of an amount of expenditure not exceeding Rs 50 per meal.
Gifts vouchers or token to employees |
Cost |
Actual amount of expenditure incurred. However, such value to be considered Nil if the value of gift per employee during the previous year in aggregate is below Rs 5,000
Membership fees and annual fees |
(Club membership, Credit card including add on- card), except initial fee paid by the employer for acquiring corporate membership of the club
Cost |
Actual amount of expenditure incurred or reimbursed by such employer on that account
Note:
There will be no perquisite in the hands of employees if details in respect of such expenditure are maintained by the employer, who gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties
The CBDT notification should have come just after the Budget to make it easy for employees to spread their tax outflow over the entire fiscal. However, it has come towards the end of the year, leaving just three months for the entire tax to be calculated and deducted at source. This is likely to result in employees having to suffer the pain of significantly lower take-homes for these months.
Calculating Fringe Benefits
Personal journey |
For employee or his/her family members at concessional rate or free of cost
Cost |
Value at which such benefit is offered by the employer to the public at large. The perquisite value shall be considered as Nil, in case employees of an airline or of railways.
Interest free/concessional loan for housing |
Cost |
Interest amount, as per the SBI rates on the loan
Expenses on travelling, touring, accommodation |
In respect to holiday trip availed by employee (excluding LTA)
Cost |
Actual amount of expenditure incurred or by such employer on that account
Free food & non-alcoholic beverages |
Cost |
Amount of expenditure incurred by the employer, except if employer provides free food and nonalcoholic beverages during the office hours at office premises or through paid vouchers of an amount of expenditure not exceeding Rs 50 per meal.
Gifts vouchers or token to employees |
Cost |
Actual amount of expenditure incurred. However, such value to be considered Nil if the value of gift per employee during the previous year in aggregate is below Rs 5,000
Membership fees and annual fees |
(Club membership, Credit card including add on- card), except initial fee paid by the employer for acquiring corporate membership of the club
Cost |
Actual amount of expenditure incurred or reimbursed by such employer on that account
Note:
There will be no perquisite in the hands of employees if details in respect of such expenditure are maintained by the employer, who gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties
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