FBT - Is it required to be paid when not claimed for Income

Senguttuvan K (Querist) 14 October 2008 This query is : Resolved
FBT is not a tax on Income

FBT is a tax on expenses

Is FBT applicable when some one is not claiming those expenses at all?

Two scenarios:

01. When a company's total income is exempted, the company can prepare memo of Income by disallowing the expenses subject to FBT and arrive at profit / loss. Suich profit is escalated to the extent of expenses subject to FBT. However, the profit is not taxable, since exempted.

02. When a company's Carry Forward Loss is huge and by not claming expenses subject to FBT the profit can be arrived.

Since this action doesn't have any impact on Book Profit, the status of MAT liability may not undergo any alteration.

Please clarify

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