Fringe benefits.
115WB. (1) For the purposes of this
Chapter, fringe benefits means any consideration for employment provided by
way of
(a) any privilege,
service, facility or amenity, directly or indirectly, provided by an employer,
whether by way of reimbursement or otherwise, to his employees (including
former employee or employees);
(b) any free or concessional ticket provided by the employer for private
journeys of his employees or their family members; 55[***]
(c) any contribution by
the employer to an approved superannuation fund for employees 56[; and]
57[(d) 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).
Explanation.For the purposes of this clause,
(i) specified security means the securities as defined in clause (h) of
section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956)58 59[and,
where employees stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan
or scheme];
(ii) sweat equity shares means equity shares
issued by a company to its employees or directors at a discount or for
consideration other than cash for providing know-how or making available rights
in the nature of intellectual property rights or value additions, by whatever
name called.]
(2) The fringe benefits shall be deemed to have been
provided by the employer to his employees, if the employer has, in the course
of his business or profession (including any activity whether or not such
activity is carried on with the object of deriving income, profits or gains)
incurred any expense on, or made any payment for, the following purposes, namely:
(A) entertainment;
(B) provision of
hospitality of every kind by the employer to any person, whether by way of
provision of food or beverages or in any other manner whatsoever and whether or
not such provision is made by reason of any express or implied contract or
custom or usage of trade but does not include
(i) any expenditure on, or payment for, food
or beverages provided by the employer to his employees in office or factory;
(ii) any expenditure on or
payment through paid vouchers which are not transferable and usable only at
eating joints or outlets;
60[(iii) any expenditure on or payment through
non-transferable pre-paid electronic meal card usable only at eating joints or
outlets and which fulfils such other conditions as may be prescribed61;]
(C) conference (other
than fee for participation by the employees in any conference).
Explanation.For the purposes of this clause, any expenditure on
conveyance, tour and travel (including foreign travel), on hotel, or boarding
and lodging in connection with any conference shall be deemed to be expenditure
incurred for the purposes of conference;
(D) sales promotion
including publicity:
Provided that any expenditure on
advertisement,
(i) being the expenditure (including rental)
on advertisement of any form in any print (including journals, catalogues or
price lists) or electronic media or transport system;
(ii) being the expenditure
on the holding of, or the participation in, any press conference or business
convention, fair or exhibition;
(iii) being the expenditure
on sponsorship of any sports event or any other event organised
by any Government agency or trade association or body;
(iv) being the expenditure
on the publication in any print or electronic media of any notice required to
be published by or under any law or by an order of a court or tribunal;
(v) being the expenditure on advertisement by way
of signs, art work, painting, banners, awnings, direct mail, electric
spectaculars, kiosks, hoardings, bill boards 62[,
display of products] or by way of such other medium of advertisement; 63[***]
(vi) being the expenditure
by way of payment to any advertising agency for the purposes of clauses (i) to (v) above;
64[65[(vii) being
the expenditure on distribution of samples either free of cost or at concessional rate; and]
(viii) being the expenditure by way of payment to
any person of repute for promoting the sale of goods or services of the
business of the employer,]
shall not be
considered as expenditure on sales promotion including publicity;
(E) employees welfare.
66[Explanation.For the purposes of this clause, any expenditure incurred or
payment made to
(i) fulfil any
statutory obligation; or
(ii) mitigate occupational
hazards; or
(iii) provide first aid
facilities in the hospital or dispensary run by the employer; or
(iv) provide creche facility for the children of the employee; or
(v) sponsor a sportsman,
being an employee; or
(vi) organise sports
events for employees,
shall not be considered as expenditure for employees
welfare;]
(F) conveyance 67[***];
(G) use of hotel,
boarding and lodging facilities;
(H) repair, running
(including fuel), maintenance of motor cars and the amount of depreciation
thereon;
(I) repair, running (including fuel) and
maintenance of aircrafts and the amount of depreciation thereon;
(J) use of telephone
(including mobile phone) other than expenditure on leased telephone lines;
(K) 68[***]
(L) festival
celebrations;
(M) use of health club
and similar facilities;
(N) use of any other club
facilities;
(O) gifts; and*
(P) scholarships;
69[(Q) tour and travel
(including foreign travel).]
(3) For
the purposes of sub-section (1), the privilege, service, facility or amenity
does not include perquisites in respect of which tax is paid or payable by the
employee 69[or any benefit or
amenity in the nature of free or subsidised transport
or any such allowance provided by the employer to his employees for journeys by
the employees from their residence to the place of work or such place of work
to the place of residence].
