Multiple choice

The benefits provided by an employer to its employees attract payment of tax. It is called

  1. income tax

  2. perquisites tax

  3. fringe benefit tax

  4. super-benefit tax
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The fringe benefits tax (FBT) was the tax applied to most, although not all, fringe benefits in India. A new tax was imposed on employers by India's Finance Act, 2005 for the financial year commencing April 1, 2005. It covered employer's expenses on entertainment, travel, employee welfare and accommodation. The definition of fringe benefits that have become taxable has been significantly extended. The law provides an exact list of taxable items.

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