Taxpayers can now adjust the advance fringe benefit tax (FBT) paid for the current fiscal against income tax or claim refund as the FBT is no longer in force.
The FBT--the tax on the added benefits or perks given by the employer to the employee -- was abolished by Finance Minister Pranab Mukherjee in the the Finance Act 2009 with effect from assessment year 2010-11. The tax was introduced in 2005.
"However, during the current fiscal some assessees have paid advance tax in respect of fringe benefits for assessment year 2010-11. The circular enables adjustment of such tax or its refund," the Central Board of Direct Taxes (CBDT) said in a circular today.
The instalment of advance FBT for assessment year 2010-11 will be treated as advance income tax paid by the assessee for assessment year 2010-11.
"The assessee can adjust such sum against his or her advance tax obligation in respect of income for financial year 2009-10," it said.
The unadjusted amount, if any, may be claimed as refund in the return of income for assessment year 2010-11 to be filed later this year, the statement added.
