Fringe Benefits Tax is the tax applied to most, although not all, fringe benefits. A new tax was imposed on employers by India's Finance Act 2005 introduced for the financial year commencing April 1, 2005. In the budget announced on July 6th, 2009, the government announced that it was to be abolished. The following items are covered: Employer's expenses on entertainment, travel, employee welfare and accommodation. The definition of fringe benefits that have become taxable has been significantly extended. The law provides an exact list of taxable items. Employer's provision of employee transportation to work or a cash allowances for this purpose. Employer's contributions to an approved retirement plan (called a superannuation fund). Employee stock option plans (ESOPs) have also been brought under Fringe Benefits Tax from the fiscal year 2007-08.
