Define Fringe Benefits Tax
Fringe benefits is one of the monetary assistance provide by a company to its employees. It provides benefits both to employees as well as employer or company.
Meaning of Fringe Benefits
Fringe benefits mean the facilities provided by an employer to his employees in addition to their salary. In simple words, you can say that when an employer provides extra facilities to his employees, at the time of their appointment or on the basis of performance, are called Fringe benefits.
Generally, companies provide fringe benefits to its employees on the basis of certain conditions. Fringe benefits generally includes health insurance, group term life coverage, education reimbursement, child care, bills of cafeteria or restaurant, entertainment expenses, employment discount, personal and official use of car provided by company, etc. fringe benefits provides many benefits to the employees.
The main advantage of fringe benefits to employee is that employee receives many facilities from company without any cost and secondly, it increases the trend of employee towards the company. It provides increased financial security to employees.
On the other hand, company also gets benefits from fringe benefits. The main advantage of fringe benefits to company is that it succeeds in winning faith of its employees. Since the financial position of employees is improved with the help of fringe benefits, thus they put more contributions in the company. As a result, the company gets increased profitability.Meaning of Fringe benefits tax
Fringe Benefits tax (FBT) is the tax which is imposed on the employer for the expenditure occurred on the employees. It was introduced in India in 2005 after passing India Finance Act 2005 but now it has no longer survival in our nation. Later on, it was abolished in 2009 when the then finance minister Mr. Pranab Mukherjee passed a Finance Bill for its abolishment.