The Indian government abolished the Fringe Benefit Tax (FBT) as part of its 2009-10 budget on 6 July 2009. This amendment, which shifts the burden of taxation on fringe benefits from employers to employees, will come into effect on 1 April 2010.
Fringe Benefit Tax was introduced in the 2005-06 fiscal year as a tax paid by employers on the portion of employee benefits not included within an employee’s salary. This included entertainment, gifts, concessional tickets for private journeys, employee stock options, etc.

As a result of the recent amendment, however, fringe benefits will now be taxed as perquisites and treated as taxable income. Employees will also be taxed on any sweat equity shares they own (shares given to employees on favourable terms), or employee stock ownership plans they participate in. They will also be taxed on any contribution in excess of INR 100,000 (USD 2,075) to an approved pension fund made by plan sponsors on their behalf.