ADJUSTMENT OF ADVANCE FBT WITH ADVANCE TAX FOR AY 2010-11
Friday, January 29, 2010
The Central Board of Direct Taxes have decided that any instalment of advance tax paid in respect of fringe benefits for assessment year (AY) 2010-11 shall be treated as advance income tax paid by assessee for AY 2010-11. The assessee can adjust such sum against its advance tax obligation in respect of income for Financial Year (FY) 2009-10. The unadjusted amount, if any, may be claimed as refund in the return of income for AY 2010-11 to be filed later this year.
Fringe Benefit Tax was introduced by the Finance Act 2005 on the value of certain fringe benefits as contained in Chapter XII H (Sections 115 W to 115 WL) of Income Tax Act, 1961. The Finance Act 2009 abolished FBT with effect from AY 2010-11. However, during the current FY 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.
