Finance Minister P Chidambaram on Monday retained both his controversial tax proposal -- the fringe benefit tax and the cash withdrawal tax -- but made modifications to offer some relief to individuals as well as corporates.
While retaining the fringe benefit tax rate at 30 per cent, Chidambaram reduced the taxable value under six categories including entertainment and hospitality from 50 per cent to 20 per cent.
Let's take look at the new tax structure.
|
The New Tax Order | ||
|
% of expense under the fringe benefit tax | ||
|
Earlier |
Now | |
|
Use of telephone (other than leased lines) |
10% |
20% |
|
Entertainment |
50% |
20% |
|
Scholarship to children of employees |
Actual |
50% |
|
Hospitality |
50% |
20% |
|
Maintenance of accommodation like guest houses |
50% |
20% |
|
Conference |
50% |
20% |
|
Employee welfare |
50% |
20% |
|
Sales promotion, including publicity |
50% |
20% |
|
Free or concessional tickets |
Actual |
Actual |
|
Contribution to superannuation fund |
Actual |
Actual |
|
Festival celebration |
50% |
50% |
|
Gifts |
50% |
50% |
|
Use of club facilities |
50% |
50% |
|
Use of health clubs, sports and similar facilities |
50% |
50% |
|
Conveyance, tour and travel, |
20% |
20% |
|
Hotel, boarding and lodging |
20% |
20% |
|
Repair, running (including fuel), maintenance of motorcars and depreciation thereon |
20% |
20% |
|
Repair, running (including fuel), maintenance of aircraft and depreciation thereon |
20% |
20% |
|
Tax of 30% will be levied on the value of the fringe benefit calculated at the above rates |
For women and senior citizens
Sectoral benefits
Cash Withdrawal Tax
Other tax changes