Fringe Benefit Tax

Rumy (Querist) 21 April 2008 This query is : Resolved
Dear All,

Hope you all are doing well.

I have a query regarding "Fringe Benefit Tax".

There is a component in my salary which is "Medical Allowance". For which I submit my bills to the employer.

My employer is deducting tax under the head FBT.

My query is, Am I liable to pay FBT from my pocket or is my employer liable and he is illegally deducting my tax.

Please enlighthen me on this.

Regards,

Baseer Qidwai

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Bharti (Expert) 21 April 2008
Hi Baseer

As per the provisions of Income tax Act, medical reimbursement upto Rs 15000/- is subject to Fringe benefit Tax in the hands of Employer and He cannot charge the same from the employee.

But if the reimbursement amount exceeds Rs 15000/- then amount exceeding 15000/- would be taxable in the hands of employee.
And excess amount is not subject to FBT.

Hope the above will suffice

Regards