to enable FBT in Tally.ERP 9?
Enabling FBT in Tally.ERP 9
1. Go to Gateway of Tally > F11: Features
> F3: Statutory & Taxation
2. Set the options Enable Fringe Benefit Tax (FBT) and Set/
Alter FBT Details to Yes
3. The Company FBT Assessee Details sub form will be
displayed, as shown.
Enter the required details and Accept the screen.
to account Interest and Penalties on FBT in Tally.ERP 9?
The Interest and Penalties can be accounted accordingly in
Tally.ERP 9 and an FBT challan can be raised.
In the event of a failure to pay advance tax for any quarter or
any payment made less than the prescribed rate of 30% of the value of fringe
benefits, interest @ 1% on the shortfall will be levied for each or part of the
month for which such shortfall continues.
1) Create an Interest Ledger account under the Indirect Expense
2) Go to Gateway of Tally > Accounting Vouchers > F5:
Payment Voucher > Ensure in F12: Configure 'Use Single entry mode for Pymt/Rcpt/Contra is set to No'.
3) Select FBT Ledger in the Debit field and enter the amount.
4) Select an Interest Ledger in the Debit field and press Enter.
Tally will prompt you from the Payment Type screen > Select the Interest as Payment Type > enter the
amount and Select the Bank ledger in the Credit field.
5) Set the option Provide Details to Yes, enter the details as shown below and Save the entry.
6) When you try to print
the Payment voucher, Tally allows you to print the FBT challan with the interest details as shown:
3. Does reimbursement of
expenditure to an employee, which is purely of a business nature, be liable to
FBT? (For example, the payment of sales tax or stamp duty paid on behalf
of the employer and reimbursed later ).
The Reimbursement of
expenditure to an employee is a Fringe Benefit provided within the framework of
the clause (a) of sub-section (1) of section 115WB. However, the FBT is payable
only with regard to reimbursements listed in clauses (A) to (P) of sub-section
(2) of section 115WB and for which the computation is provided in section
If the computation is
not provided for the Fringe Benefit provided or deemed to have been provided, a
benefit of that sort is not liable to FBT.
4. Does section 115WB
create two classes of Fringe Benefits under sub-section (1) and (2), i.e.,
Fringe benefits and Deemed Fringe Benefits?
Section 115WB defines
'fringe benefits'. Sub-section (1) refers to the specific fringe benefits
provided by the employer to employees directly, i.e:
1. Any privilege, service, facility or amenity,
which is directly or indirectly made whether by way of reimbursement or
otherwise provided by an employer to the employees (including former employee
2. Any free or concessional ticket provided by the
employer for private journeys to employees or their family members.
3. Any contribution by the employer towards an
approved superannuation fund for employees.
4. Any specified security
or sweat equity shares allotted or transferred, directly or indirectly, by the
employer free of cost or at concessional rate to his employees (including
former employee or employees)
Sub -section (2)
provides that fringe benefits shall be deemed to have been provided
by the employer to his employees if the employer incurs any expense on or makes any payment for
the purposes enumerated in clauses (A) to (P)
D. Sales promotion
E. Employees’ welfare
G. Hotel, boarding,
lodging Repair, running and maintenance of cars and the amount of Depreciation
H. Repair, running and
maintenance of aircraft and amount of Depreciation thereon
I. Use of the telephone
J. Maintenance of any
accommodation in the nature of guest house
K. Festival celebrations
L. Health Club/Any other
N. Scholarship to
O. Tour and travel
(including foreign travel)
5. Are expenses
segregated into those incurred for official purposes and those for personal
Fringe benefit is
deemed to have been provided if the employer has incurred expenses for any
purpose referred to in sub-section (2) of section 115WB. A proportion (20% or
50% or 5% as the case may be) of all the expenses falling under the relevant
head in sub-section (2) of section 115WB will be taken as the taxable value of
the fringe benefits.
There is no
requirement to segregate the various expenses referred to in section
115WB, in terms of expenses incurred for official purposes and those
incurred for personal purposes.
6. Is FBT payble on advances paid for expenses?
The FBT is liable to
be paid only for the expenditure incurred and therefore is not applicable on
7. Is the gross or net
expense considered for the purposes of FBT? For example, part of the expenses
on various items like travel, may be recovered from the employees. Therefore,
should FBT be levied on the 'gross' travel expenditure or on the 'net' travel
In cases where the
employer recovers any amount of expenditure incurred by its employees against
the purposes listed in clauses (A) to (P) of sub-section (2) of section 115WB,
the value of the fringe benefits can be determined with reference to the net
expenditure and not the gross expenditure.
For example, if an
employer incurs a total expenditure of Rs 10 lakh on
the repair, running and maintenance of motor-cars, and recovers Rs 1 lakh from its employees, the value of the fringe benefit
with regard to the repair, running and maintenance of motor-cars will be
calculated on the basis of the net expenditure of Rs 9 lakh (i.e., Rs 10 lakh minus Rs. 1 lakh)
8. Would the
contributions made to an approved gratuity or provident fund attract FBT?
Section 115WB read
with section 115WC does not specifically contain any provision for
contributions made to an approved gratuity or provident fund that could attract
FBT. Therefore, any contribution made to either of these funds would not
9. Are medical
reimbursements upto Rs. 15,000 (exempt in the hands
of the employees) and medical reimbursement over Rs. 15,000 (taxed as
perquisite in the hands of the employee) liable to FBT?
At present, if any sum
is paid by the employer for an expenditure actually incurred by the employee
for medical treatment in an unapproved hospital and it exceeds Rs 15,000 during
the year, such sum is considered as a 'salary' defined in clause (1) of section
17 of the Income-tax Act, and is therefore liable to income-tax in the hands of
There is no change in
this position. Since such a sum is taxable in the hands of the employee, the
same is not liable to FBT.
However, if a sum is
paid by the employer for an expenditure that was actually incurred by the
employee for medical treatment in an unapproved hospital and it does not exceed
Rs 15,000 during the year, that sum does not fall within the meaning of 'salary
as defined in clause (1) of section 17 of the Income-tax Act and is therefore
not liable to income-tax in the hands of the employee.
There is no change in
this position. Since such a sum is not taxable in the hands of the employee,
the same is liable to FBT.
10. Can the advance tax
paid in excess for the preceding quarter be adjusted against the advance
tax for the subsequent quarter(s)?
any advance tax paid in excess for the preceding quarter can be adjusted
against the advance tax for the subsequent quarter(s).