Creating FBT Journal with Class

You can also create a journal voucher with class. After selecting Journal Voucher for entry select the class i.e. Fringe Benefit Recovery and debit the party account and credit the expense account.

Creating FBT Journal without Class

To record a transaction involving FBT, we have to create a journal for FBT , when there is no class and have to debit the respective category of expense and credit party account.

Voucher Type Creation

For FBT transaction, the Journal voucher type has to altered. If you don't want to alter the existing voucher then you can create a new voucher, the voucher type should be Journal. In the Voucher type Creation/Alteration screen, type the class name for example Fringe Benefit Recovery and set the option "Use Class for FBT recovery" to 'yes'.

Ledger Creation for FBT

Three ledger are to be created in case of FBT. They are as follows :

• Tax Ledger : Create FBT ledger under the group Duties and Taxes. Select FBT at the field 'Type of Duty/Tax'.
• Party Ledger : Create party ledger under Sundry Creditors/Debtors.
• Expenses Ledger : Create an expense ledger under indirect expenses. Set 'yes' at the option "Is FBT Applicable", list of FBT categories will appear. Select the appropriate option from there.

(Creation of ledger => Gateway of Tally -> Masters -> Accounts info -> Ledger -> Create.)

Configuration Set Up for FBT in Tally

For configuration set up press F12 and select General. There select 'India/SAARC' at the option - "Use Accounting terminology of ".
Then set up the FBT features by pressing F11 and then press F3 i.e., Statutory and Taxation and set 'yes' to the options "Enable Fringe Benefit Tax" and "Set/Alter FBT Details".
There it will ask you for Company FBT Assesse Details. You have to provide the following details there :

• PAN/Income-Tax no. - Enter the Permanent Account Number(PAN) of the company/organisation alloted by the Income Tax Department.
• Assesse Type - Enter the type of assesse to which the organisation belongs from the list provided.
• Is surcharge Applicable - Tally automatically sets the option to 'yes'. Choose the proper option as per the situation.
• Assessee Category - Select the appropriate assessee category.
  

Fringe Benefit Tax(FBT)

Another type of direct tax is Fringe Benefit Tax. This tax is applicable on perquisites, which the employer provides to the employees in addition to cash salary and wages paid during the year. It is paid in addition to Income Tax and is paid at a specified rate. The tax is levied on the employer and is calculated on the net amount of expenses. The expenses that fall under this tax are expenses for entertainment, cars, club, etc.
It is very easy to operate FBT features in Tally, which facilitates automatic computation of Fringe Benefit Tax based on the voucher entry made by the user.