As you are aware, the Finance Act 2009-10 has done away with the concept of Fringe Benefits Tax. Consequently, all the erstwhile ‘Fringe Benefits’ like Car related components, Food Coupons, etc., will now be treated as perquisites and taxed accordingly at normal income tax rates applicable to your income.
The Central Board of Direct Taxes has recently issued the guidelines on valuation of these perquisites. These valuations and their consequent taxation are effective from 01 Apr 2009.
As per the valuation circulated, Food Coupons are exempt to the extent of Rs. 50/- per meal. Hence the maximum amount that is tax free as far as food coupons are concerned has been frozen at Rs.1100/- per month. Since these rules are effective 01 Apr 2009, the resultant tax on the balance amount of Rs. 550/- already paid per month will be recovered in retrospect, in the remaining months i.e., January 2010 to March 2010.
As a policy change in relation to food coupons, the monthly value of food coupons will be Rs. 1100/- effective Jan 2010. Employees who have presently opted for food coupons, will be paid Rs. 550/- as special allowance along with food coupons amounting to Rs. 1100/-.
Best regards,
Team Corporate HR
No comments:
Post a Comment