The Fringe Benefit Tax (FBT) collections in April-May 2008-09 stood at Rs 109 crore against Rs 117 crore during the same period last year.
"This shows that companies are adopting an all cash-out policy. They are planning smart salaries for their employees in a manner so as to minimise FBT payment," Consultant Anirudh from Executive Access, a head hunting firm, told PTI.
Also, he added, now that companies have understood the FBT and its nuances, they are cutting on the business travel cost and services provided to employees, which may also be a factor in the decline of FBT collections.
This may lead to a further dent in the FBT collections, he added. However, a few also opined that the reduction may also be due to various reliefs given to certain areas like guest houses in this fiscal's budget.
"Minor relief given in the Budget like expenses on guest houses, fresh facilities and encouragement to sports may also have contributed the decline, though not much. It may be better tax planning by the corporates that has saved them tax on FBT," E&Y Partner Amitabh Singh said.
However, official sources said the data on FBT collection has arrived for only two months and it is very difficult to take it as a trend for the whole year.
