FRINGE BENEFITS TAX
FBT stands for 'Fringe Benefits Tax' and it was introduced as part of Finance Act in 2005 as an additional income-tax and came which apply on an employer when it provides additional facility to its employee except for salary.
FEATURES OF FBT
FEATURES OF FBT
1. Fringe Benefits Tax should be pay by an employer.
2. Fringe Benefit Tax is an example of direct tax.
2. Fringe Benefit Tax is an example of direct tax.
3. An employer has to pay Fringe Benefit on the total income.
EMPLOYER CATEGORIES
Artificial Juridical Person
Association of Persons
Body of individuals
Firms/ Domestic Companies
Local Authority
Non – Domestic Companies
BENEFITS LIST
Entertainment
Hospitality
Conference
Sales promotion including publicity
Employee welfare
Conveyance, tours and travel
Hotel, boarding, lodging
Repair, running and maintenance of cars
Repair, running and maintenance of aircraft
Use of telephone
Festival celebrations
Health Club
Any other club
Gifts
FBT ACTIVATION STEPS IN TALLY ERP-9
1. Open an already existing company
2. Press “F11” key.
3. Select the “Statutory & Taxation”
4. Now make yes to the following options.
Enable Fringe Benefit Tax (FBT)
Set/Alter FBT Details
FBT LEDGER
Group: Indirect Expenses
Is FBT Applicable: Yes
FBT Category: Conveyance
FBT LEDGER
Ledger name: Conveyance a/c
Group: Indirect Expenses
Is FBT Applicable: Yes
FBT Category: Conveyance
FBT EXERCISE
Company Name: Ritesh Hardware & Electronics
Inventory items
Stock items | Brand/Company | Quantity | Price | Sales Price |
Watch | Titan | 100 | 6500 | 7,000 |
Processor | Intel | 160 | 4000 | 4,500 |
Locks | Harison | 200 | 750 | 800 |
Brush | Paint | 150 | 120 | 160 |
Cabinet | Adcom | 60 | 1200 | 1400 |
Ledger Entries
Cash in hand Rs. 5,00,000
Cash in bank Rs. 4,50,000
Voucher Entries
1. Sold goods by cash (2 Watches, 10 Locks)
2. Return defected goods (2 Locks)
3. Paid entertainment expenses Rs. 7,000 with FBT
4. Purchase goods by discount 4% (10 Processors, 10 watches)
5. Receive commission Rs. 15,000
6. Paid conveyance charges Rs. 15,000 with FBT
7. Withdraw cash Rs. 2,50,000 from bank to office use.
8. Sold goods for cash (2 watches with 20% VAT & 3 Processor with 5%)
9. Purchase goods on credit (20 Brush with 12.5 VAT & Cabinet 5%)
10. Sold goods by cash (50 Brush) with 2% CST
11. Paid office rent Rs. 25,000 by cheque
12. Paid manager’s telephone bill amount Rs. 6,500 with FBT
0 Comments