Govt extends FBT deadline till December 15

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New Delhi, Sept 12 (UNI) The government today extended the due date of payment of the first and second installment of advance fringe benefit tax (FBT) on ESOPS till December 15, which was earlier due on September 15.

In absence of a method for determination of the fair market value, it will not be possible for an employer to determine the value of these installments of advance tax related to fringe benefit tax in respect of allotment or transfer of specified security or sweat equity shares to its employees, an official statement said.

In order to mitigate this hardship, the Central Board of Direct Taxes (CBDT) decided that the first installment of FBT, which was to be paid on or before June 15, and the second installment to be paid on or before September 15 in respect of transfer or allotment of specified security or sweat equity shares to its employees, may be paid on or before the December 15 this year.

CBDT is currently in the final stage of finalising the method for determination of the fair market value.

By virtue of the provision of clause (d) of sub-section (1) section 115 WB, introduced by Finance Act, 2007, an employer is liable to pay FBT on any consideration for employment provided by way of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by such employer free of cost or at concessional rate to his employees.

The value of the fringe benefit is determined as the fair market value of the specified security or sweat equity share on the date on which the option vests with the employee as reduced by the amount actually paid, by or recovered from the employee in respect of such security or shares. The fair market value for this purpose is to be determined in accordance with the method prescribed by the board.

Since the method for determination of the fair market value was yet to be prescribed, CBDT had earlier extended the date of payment of first installment of FBT, which was to be paid on or before June 15 this year, in respect of transfer or allotment of specified security or sweat equity shares to its employees to September 15.

UNI

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