The Hindu Business Line : Budget issues

According to the Budget Memorandum, the proposed fringe benefits tax is payable by an employer who may be an individual, HUF, firm, AOP, a company or local authority. It includes 17 items of expenditure to be construed as fringe benefits. In addition, it includes cost of free or concessional tickets for private journeys of the employees or their family members and the contribution made by the employer to an approved superannuation fund.

The tax on concessional travel could have a negative impact on the domestic tourism industry if employers decide to do away with it. All this could also lead to disgruntlement and possibly industrial strife.

When viewed in the context of the withdrawal of standard deduction, and Section 80-L, which will affect senior citizens and pensioners and the proposed cash withdrawal tax, this Budget appears anti-middle class. The FBT could also lead to corruption in tax assessment and increased litigation. Although the Finance Minister has promised to look into the cash withdrawal tax and has appointed a committee to examine the FBT, the Congress Party could well be staring at the alienation of the salaried class unless satisfactory corrective measures are taken.

T.T. Krishnan

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