Section 115W and 115WA of Income Tax Act 1961 - Definitions and Charge of Fringe Benefit Tax

Sections 115W and 115WA of the Income Tax Act, 1961 deal with the definitions relating to Fringe Benefit Tax and the charge of Fringe Benefit Tax.

Section 115W of Income Tax Act 1961 - Definitions

Section 115W: In this Chapter, unless the context otherwise requires:

(a) Employer means:

  • a company;
  • a firm;
  • an association of persons or body of individuals, whether incorporated or not;
  • a local authority; and
  • every artificial juridical person not falling within the preceding categories.

However, a person eligible for exemption under section 10(23C), registered under section 12AA, or a political party registered under section 29A of the Representation of the People Act, 1951 is not treated as an employer for this Chapter.

Fringe Benefit Tax or Tax means the tax chargeable under section 115WA of the Income Tax Act, 1961.

Section 115WA of Income Tax Act 1961 - Charge of Fringe Benefit Tax

Section 115WA provides that, in addition to income tax charged under the Act, additional income tax known as Fringe Benefit Tax shall be charged in respect of fringe benefits provided or deemed to have been provided by an employer to employees during the previous year.

The tax was applicable for assessment years commencing on or after 1 April 2006 at the prescribed rate on the value of fringe benefits.

Even where no income tax is payable by an employer on total income, Fringe Benefit Tax liability could arise under section 115WA.

Legal Note

The Fringe Benefit Tax provisions were introduced by the Finance Act, 2005 and were subsequently withdrawn. Sections 115W onwards form part of the historical provisions of the Income Tax Act, 1961.