What is the reaction of India Inc to fringe benefit tax?  

India Inc is quite nervous about the proposed fringe benefit tax and feels that the gains from the reduction in corporate tax announced in the last Budget would be nullified by the cut in depreciation rates.

Nearly 70 per cent of the CEOs surveyed in the Associated Chambers of Commerce and Industry's Business Barometer survey were happy with the reduction of the corporate tax from 35 per cent to 30 per cent, while 57 per cent out of them were of the view that the gains from the corporate tax reduction will be nullified because of the cut in the depreciation rates.

Most of the CEOs surveyed said that the impact of the fringe benefit tax would be 'most severe' on Indian enterprises. They argued that advertisement and sales promotion expenses should not be included under fringe benefit tax.

The survey also pointed out that the cash withdrawal tax would be a big blow for small retailers and dealers.

However, 30 per cent of the respondents said that since the surcharge has also been increased from 2.5 per cent to 10 per cent, the overall benefit of the corporate tax reduction was only around three per cent.

Some software firms feel that a wide variety of payments would come under the ambit of fringe benefit tax. A recent survey also said that because of the impact of the fringe benefit tax, companies across sectors are likely to cut down on the increments that employees would get.

The proposal has invited criticism even from the Institute of Chartered Accountants of India, which has otherwise praised the finance minister for rationalising the tax administration.

Answered by Om Prakash at 6:45 PM on September 26, 2008

Reaction of the Indian Incorporations as to the enactment of FBT-India Inc is quite nervous about the proposed fringe benefit tax and feels that the gains from the reduction in corporate tax announced in the last Budget would be nullified by the cut in depreciation rates.

# Reaction of Software firms[6]-Some software firms feel that a wide variety of payments would come under the ambit of fringe benefit tax. A recent survey also said that because of the impact of the fringe benefit tax, companies across sectors are likely to cut down on the increments that employees would get. The proposal has invited criticism even from the Institute of Chartered Accountants of India, which has otherwise praised the finance minister for rationalising the tax administration.

# Small firms might be spared: A Business Standard report said that the finance ministry is considering a threshold staff strength for levying the fringe benefit tax on employers.

Finance ministry officials indicated that organizations with very few employees could be exempted from the tax. This is based on the assumption that small employers do not spend large amounts on fringe benefits. The ministry will also examine combining the tax return for fringe benefits with the income tax return to avoid the need for filing separate forms, the report said.

For more detail-
http://www.legalservi ceindia.com/article/l47-overvi ew-of-Fringe-benefit-tax.html

Answered by Nagendra at 8:27 AM on September 24, 2008

Reaction of the Indian Incorporations as to the enactment of FBT-India Inc is quite nervous about the proposed fringe benefit tax and feels that the gains from the reduction in ...

India Inc lauds higher allocation for critical sectors ... Fringe Benefit Tax provisions modified Business Line , March 1,2006 ... Mixed reaction from trade captains The Statesman , March ... Focus on education, agriculture Mixed reaction from Indian Inc to ... become Infosys' Emulate Taipei model in India ... STPI scheme nor is there any re-look at the Fringe Benefit Tax

Answered by Vipan Thapar at 4:31 PM on September 23, 2008

Well According to Finance Minister India Inc is strongest than other countries but India Inc is quite nervous about the proposed fringe benefit tax and feels that the gains from the reduction in corporate tax announced in the last Budget would be nullified by the cut in depreciation rates.

Nearly 70 per cent of the CEOs surveyed in the Associated Chambers of Commerce and Industry's Business Barometer survey were happy with the reduction of the corporate tax from 35 per cent to 30 per cent, while 57 per cent out of them were of the view that the gains from the corporate tax reduction will be nullified because of the cut in the depreciation rates.

Most of the CEOs surveyed said that the impact of the fringe benefit tax would be 'most severe' on Indian enterprises. They argued that advertisement and sales promotion expenses should not be included under fringe benefit tax.

The survey also pointed out that the cash withdrawal tax would be a big blow for small retailers and dealers.

However, 30 per cent of the respondents said that since the surcharge has also been increased from 2.5 per cent to 10 per cent, the overall benefit of the corporate tax reduction was only around three per cent.

Some software firms feel that a wide variety of payments would come under the ambit of fringe benefit tax. A recent survey also said that because of the impact of the fringe benefit tax, companies across sectors are likely to cut down on the increments that employees would get.

The proposal has invited criticism even from the Institute of Chartered Accountants of India, which has otherwise praised the finance minister for rationalising the tax administration.

Information collected from http://www.rediff.com/money/2005/ma r/22spec.htm

Answered by Hemant Kumar at 1:05 PM on September 23, 2008

India Inc is quite nervous about the proposed fringe benefit tax and feels that the gains from the reduction in corporate tax announced in the last Budget would be nullified by the cut in depreciation rates.

Nearly 70 per cent of the CEOs surveyed in the Associated Chambers of Commerce and Industry's Business Barometer survey were happy with the reduction of the corporate tax from 35 per cent to 30 per cent, while 57 per cent out of them were of the view that the gains from the corporate tax reduction will be nullified because of the cut in the depreciation rates.

Most of the CEOs surveyed said that the impact of the fringe benefit tax would be 'most severe' on Indian enterprises. They argued that advertisement and sales promotion expenses should not be included under fringe benefit tax.

The survey also pointed out that the cash withdrawal tax would be a big blow for small retailers and dealers.

However, 30 per cent of the respondents said that since the surcharge has also been increased from 2.5 per cent to 10 per cent, the overall benefit of the corporate tax reduction was only around three per cent.

Some software firms feel that a wide variety of payments would come under the ambit of fringe benefit tax. A recent survey also said that because of the impact of the fringe benefit tax, companies across sectors are likely to cut down on the increments that employees would get.

The proposal has invited criticism even from the Institute of Chartered Accountants of India, which has otherwise praised the finance minister for rationalising the tax administration.

Answered by Ashwani at 5:37 AM on September 23, 2008