Section 115WB of ITA, 1961 : Section 115Wb: Fringe Benefits

Explanation using Example

Imagine a software company, TechVantage, which provides various benefits to its employees. These benefits include a company car for senior managers, gym memberships, and occasional hotel stays for business trips. Under Section 115WB of The Income-tax Act, 1961, these perks can be considered as "fringe benefits" provided by the employer.

For example, if TechVantage pays for the fuel and maintenance of the company cars used by its employees, this expense could be considered a fringe benefit under clause (H) of Section 115WB(2). Similarly, if the company sponsors an annual retreat at a luxury resort for all employees, the cost of this event, including accommodation and food, would fall under the fringe benefits category as per clauses (G) and (L).

However, if TechVantage provides a shuttle service for employees to commute from their homes to the office, this would not be considered a fringe benefit under Section 115WB(3), as it is a transport service from residence to workplace, which is excluded.

The company must evaluate these expenses and comply with the tax implications as prescribed by the Income-tax Act, which may include calculating the Fringe Benefit Tax (FBT) associated with these benefits.