ICAI will issue a guidance note in this respect on Tuesday, institute president Kamlesh S Vikamsey said. As per the guidance note, one more head should be added to the categories of current tax and deferred tax to account for FBT.
The note recognises that the FBT is an additional tax as far as employer is concerned. "Therefore this tax should be disclosed as a separate item. The amount of FBT outstanding at the year-end, if any, should be disclosed separately as a provision in the balance sheet," the note adds.
Vikamsey emphasised that the guidance note was specifically for accounting purpose and did not deal with computation of FBT. For computing FBT, a separate guidance note will be issued by September, he said.
Earlier this month, Finance Minister P Chidambaram had said FBT is based on certification by chartered accountants, who are expected to follow guidelines issued by ICAI.
FBT is now part of income tax return and a schedule has been added to the return, the Finance Minister said. To a query whether FBT will be extended to the government sector, Chidambaram had said, "the government cannot tax itself."
When asked whether collections from FBT will touch Rs 9,000 crore (Rs 90 billion) as is estimated by certain experts, he said, "my guess is as good as yours."
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