Full formBusiness & Corporate
FTBstands forFringe Benefits Tax
Full Form of FTB
What is FTB?
Fringe Benefits Tax (FTB) was a tax levied by the Government of India on employers for the value of fringe benefits provided to their employees. Introduced under the Income Tax Act, 1961, via the Finance Act of 2005, FTB aimed to capture the monetary worth of non-salary perks such as company cars, housing allowances, club memberships, and subsidized loans that employees received. Employers were required to compute and pay FTB at a flat rate (initially 30%, later reduced) on the taxable value of these benefits, which was over and above the employee’s salary income. The tax was controversial for increasing compliance burdens and was ultimately abolished in the Finance Act of 2009, effective from the assessment year 2010-11. Since its repeal, the value of fringe benefits is now taxed directly in the hands of employees as perquisites under the head 'Salaries'. FTB remains an important topic for students of Indian taxation law, especially those preparing for CA, CS, and CMA examinations, as it illustrates the evolution of corporate tax policy in India and the shift from employer-level to employee-level taxation of perks.
FTB का फुल फॉर्म
फ्रिंज बेनिफिट्स टैक्स
Example
Before its abolition, companies had to file an FTB return and pay additional tax on the rental value of cars provided to their senior executives.
FTB — frequently asked questions
What is the full form of FTB?
The full form of FTB is Fringe Benefits Tax, a tax that was payable by employers on certain benefits given to employees.
When was FTB introduced and abolished in India?
FTB was introduced by the Finance Act of 2005 and was subsequently abolished by the Finance Act of 2009, with effect from the assessment year 2010-11.
Who was liable to pay FTB?
Employers (including companies, firms, and other entities) were liable to pay FTB on the value of fringe benefits provided to their employees, regardless of whether the employee was taxed on those benefits.