law: The Income-Tax Act, 1961
  B.-Basis of charge
  115WA. Charge of fringe benefit tax.-
  (1) In addition to the income-tax charged under this Act, there shall be charged for every assessment year commencing on or after the 1st day of April, 2006, additional income-tax (in this Act referred to as fringe benefit tax) in respect of the fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year at the rate of thirty per cent on the value of such fringe benefits.
  (2) Notwithstanding that no income-tax is payable by an employer on his total income computed in accordance with the provisions of this Act, the tax on fringe benefits shall be payable by such employer.
  115WB. Fringe benefits.-
  (1) For the purposes of this Chapter, "fringe benefits" means any consideration for employment provided by way of-
  (a) any privilege, service, facility or amenity, directly or indirectly, provided by an employer, whether by way of reimbursement or otherwise, to his employees (including former employee or employees);
  (b) any free or concessional ticket provided by the employer for private journeys of his employees or their family members; 4***
  (c) any contribution by the employer to an approved superannuation fund for 5[employees; and]
  5[(d) anyspecified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer free of cost or at concessional rate to his employees (including former employee or employees).
  Explanation.-For the purposes of this clause,-
  (i) "specified security" means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) 1[and, where employees' stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme];
  (ii) "sweat equity shares" means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.]
  (2) The fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely:-
  (A) entertainment;
  (B) provision of hospitality of every kind by the employer to any person, whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade but does not include-
  (i) any expenditure on, or payment for, food or beverages provided by the employer to his employees in office or factory;
  (ii) any expenditure on or payment through paid vouchers which are not transferable and usable only at eating joints or outlets;
  2[(iii) any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfils such other conditions as may be prescribed;]
  (C) conference (other than fee for participation by the employees in any conference).
  Explanation.-For the purposes of this clause, any expenditure on conveyance, tour and travel (including foreign travel), on hotel, or boarding and lodging in connection with any conference shall be deemed to be expenditure incurred for the purposes of conference;
  (D) sales promotion including publicity:
  Provided that any expenditure on advertisement,-
  (i) being the expenditure (including rental) on advertisement of any form in any print (including journals, catalogues or price lists) or electronic media or transport system;
  (ii) being the expenditure on the holding of, or the participation in, any press conference or business convention, fair or exhibition;
  (iii) being the expenditure on sponsorship of any sports event or any other event organised by any Government agency or trade association or body;
  (iv) being the expenditure on the publication in any print or electronic media of any notice required to be published by or under any law or by an order of a court or tribunal;
  (v) being the expenditure on advertisement by way of signs, art work, painting, banners, awnings, direct mail, electric spectaculars, kiosks, hoardings,3[bill boards, display of products] or by way of such other medium of advertisement; 4***
  (vi) being the expenditure by way of payment to any advertising agency for the purposes of clauses (i) to (v) above;
  1[2[(vii) being the expenditure on distribution of samples either free of cost or at concessional rate; and]
  (viii) being the expenditure by way of payment to any person of repute for promoting the sale of goods or services of the business of the employer,] shall not be considered as expenditure on sales promotion including publicity;
  (E) employees' welfare.
  3[Explanation.-For the purposes of this clause, any expenditure incurred or payment made to-
  (i) fulfil any statutory obligation; or
  (ii) mitigate occupational hazards; or
  (iii) provide first aid facilities in the hospital or dispensary run by the employer; or
  (iv) provide creche facility for the children of the employee; or
  (v) sponsor a sportsman, being an employee; or
  (vi) organise sports events for employees, shall not be considered as expenditure for employees' welfare;]
  (F) conveyance;4***
  (G) use of hotel, boarding and lodging facilities;
  (H) repair, running (including fuel), maintenance of motor cars and the amount of depreciation thereon;
  (I) repair, running (including fuel) and maintenance of aircrafts and the amount of depreciation thereon;
  (J) use of telephone (including mobile phone) other than expenditure on leased telephone lines; 5* * * *
  (L) festival celebrations; (M) use of health club and similar facilities;
  (N) use of any other club facilities;
  (O) gifts; and
  (P) scholarships;
  6[(Q) tour and travel (including foreign travel).]
  (3) For the purposes of sub-section (1), the privilege, service, facility or amenity does not include perquisites in respect of which tax is paid or payable by the employee 1[or any benefit or amenity in the nature of free or subsidised transport or any such allowance provided by the employer to his employees for journeys by the employees from their residence to the place of work or such place of work to the place of residence.]
  4. The word "and" omitted by Act 22 of 2007, s. 38 (w.e.f. 1-4-2008).
  5. Ins. by s. 38, ibid. (w.e.f. 1-4-2008).
  1. Subs. by Act 18 of 2008, s. 25, for "and includes employees' stock option" (w.e.f. 1-4-2008).
  2. Ins. by s. 25, ibid. (w.e.f. 1-4-2009).
  3. Subs. by Act 22 of 2007, s. 38, for "bill boards" (w.e.f. 1-4-2008).
  4. The word "and" omitted by Act 21 of 2006, s. 28 (w.e.f. 1-4-2007).
  1. Ins. by Act 21 of 2006, s. 28 (w.e.f. 1-4-2007).
  2. Subs. by Act 22 of 2007, s. 38, for clause (vii) (w.e.f. 1-4-2008).
  3. Subs. by Act 18 of 2008, s. 25, for the Explanation (w.e.f. 1-4-2009).
  4. The words and brackets ", tour and travel (including foreign travel)" omitted by Act 21 of 2006, s. 28 (w.e.f. 1-4-2007).
  5. Clause (k) omitted by Act 18 of 2008, s. 25 (w.e.f. 1-4-2009).
  6. Ins. by Act 21 of 2006, s. 28 (w.e.f. 1-4-2007)
  1. Ins. by Act 21 of 2006, s. 28. (w.e.f. 1-4-2007).
  115WC. Value of fringe benefits.-
  (1) For the purposes of this Chapter, the value of fringe benefits shall be the aggregate of the following, namely:-
  (a) cost at which the benefits referred to in clause (b) of sub-section (1) of section 115WB, is provided by the employer to the general public as reduced by the amount, if any, paid by, or recovered from, his employee or employees:
  Provided that in a case where the expenses of the nature referred to in clause (b) of sub-section (1) of section 115WB are included in any other clause of sub-section (2) of the said section, the total expenses included under such other clause shall be reduced by the amount of expenditure referred to in the said clause (b) for computing the value of fringe benefits;
  2[(b) the amount of contribution, referred to in clause (c) of sub-section (1) of section 115WB, which exceeds one lakh rupees in respect of each employee;]
  3[(ba) the fair market value of the specified security or sweat equity shares referred to in clause (d) of sub-section (1) of section 115WB, on the date on which the option vests with the employee as reduced by the amount actually paid by, or recovered from, the employee in respect of such security or shares.
  Explanation.-For the purposes of this clause,-
  (i) "fair market value" means the value determined in accordance with the method as may be prescribed by the Board;
  (ii) "option" means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price;]
  (c) twenty per cent of the expenses referred to in 4[clauses (A) to (L)] of sub-section (2) of section 115WB;
  (d) fifty per cent of the expenses referred to in 5[clauses (M) to (P)] of sub-section (2) of section 115WB;
  6[(e) five per cent. of the expenses referred to in clause (Q) of sub-section (2) of section 115WB.] (2) Notwithstanding anything contained in sub-section (1),-
  (a) in the case of an employer engaged in the business of hotel, the value of fringe benefits for the purposes referred to in clause (B) of sub-section (2) of section 115WB shall be "five per cent." instead of "twenty per cent." referred to in clause (c) of sub-section (1);
  6[(aa) in the case of an employer engaged in the business of carriage of passengers or goods by aircraft, the value of fringe benefits for the purposes referred to in clause (B) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent" referred to in clause (c) of sub-section (1);
  (ab) in the case of an employer engaged in the business of carriage of passengers or goods by ship, the value of fringe benefits for the purposes referred to in clause (B) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent." referred to in clause (c) of sub-section (1);]
  (b) in the case of an employer engaged in the business of construction, the value of fringe benefits for the purposes referred to in clause (F) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent" referred to in clause (c) of sub-section (1);
  (c) in the case of an employer engaged in the business of manufacture or production of pharmaceuticals, the value of fringe benefits for the purposes referred to in clauses (F) and (G) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent" referred to in clause (c) of sub-section (1);
  (d) in the case of an employer engaged in the business of manufacture or production of computer software, the value of fringe benefits for the purposes referred to in clauses (F) and (G) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent" referred to in clause (c) of sub-section (1);
  1[(da) in the case of an employer engaged in the business of carriage of passengers or goods by aircraft, the value of fringe benefits for the purposes referred to in clause (G) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent" referred to in clause (c) of sub-section (1);
  (db) in the case of an employer engaged in the business of carriage of passengers or goods by ship, the value of fringe benefits for the purposes referred to in clause (G) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent" referred to in clause (c) of sub-section (1);]
  (e) in the case of an employer engaged in the business of carriage of passengers or goods by motor car, the value of fringe benefits for the purposes referred to in clause (H) of sub-section (2) of section 115WB shall be "five per cent" instead of "twenty per cent" referred to in clause (c) of sub-section (1);
  (f) in the case of an employer engaged in the business of carriage of passengers or goods by aircraft, the value of fringe benefits for the purposes referred to in clause (1) of sub-section (2) of section 115WB shall be taken as Nil.
  2. Subs. by s. 29, ibid., for clause (b) (w.e.f. 1-4-2007).
  3. Ins. by Act 22 of 2007, s. 39 (w.e.f. 1-4-2008).
  4. Subs. by Act 18 of 2008, s. 26, for "clauses (A) to (K)" (w.e.f. 1-4-2009).
  5. Subs. by s. 26, ibid., for "clauses (L) to (P)" (w.e.f. 1-4-2009).
  6. Ins. by Act 21 of 2006, s. 29 (w.e.f. 1-4-2007).
  1. Ins. by Act 21 of 2006, s. 29 (w.e.f. 1-4-2007).