Fringe Benefit Tax (FBT)

Fringe Benefit Tax (FBT) – Fringe Benefit Tax was a tax levied on the value of certain benefits and perks provided by employers to their employees, in addition to salary or wages. These benefits included expenses such as entertainment, travel, employee welfare, and gifts provided by the employer. The objective of FBT was to ensure that all forms of employee compensation, whether direct or indirect, were appropriately taxed. It was introduced in Finance Act, 2005 and was applicable from Assessment Year 2006–07 onwards. However, the Fringe Benefit Tax was abolished from Assessment Year 2010–11. The Assessment Year is when income earned in the previous Financial Year (FY) is evaluated and taxed.

Example: Benefits provided by an employer during FY 2008–09 were taxed under FBT in AY 2009–10..