Income-tax Act, 1961 / Historical fringe benefit tax

Section 115WK - Interest for Default in Furnishing Return of Fringe Benefits

Current applicability: Fringe benefit tax (FBT) was discontinued from Assessment Year 2010-11 by Section 115WM, inserted through the Finance (No. 2) Act, 2009. Section 115WK is therefore a historical provision relevant to the former FBT regime, not a current obligation to file annual FBT returns.

Section 115WK of the Income-tax Act, 1961 provided for interest when an employer submitted a return of fringe benefits late or failed to submit it. The provision formed part of Chapter XII-H, which governed taxation of certain employer-provided benefits. It must be read alongside the return-filing requirements of Section 115WD and the assessment and advance-tax provisions of Sections 115WE, 115WF, 115WG and 115WJ.

What Section 115WK provided

Sub-section (1): Where a return under Section 115WD(1) or (3), or in response to a notice under Section 115WD(2), was furnished after the due date or not furnished, the employer was liable to simple interest at 1% for every month or part of a month beginning immediately after the applicable due date.

Late return: Interest ran up to the date on which the return was furnished.
No return: Interest ran up to completion of the best-judgment assessment under Section 115WF.
Amount: Interest was calculated on tax on the value of fringe benefits determined under Section 115WE(1) or regular assessment, after reducing advance tax paid under Section 115WJ.

Explanation 1: The expression due date referred to the date specified in the Explanation to Section 115WD(1), as applicable to the employer.

Explanation 2: An assessment first made under Section 115WG was treated as a regular assessment for the purposes of Section 115WK.

Sub-section (2): Sections 234A(2) to (4) applied, so far as possible, to interest under Section 115WK.

Historical return due dates under Section 115WD

Employer category	Statutory due date under the historical provision
Company or other employer whose accounts were required to be audited	30 September of the assessment year
Other employer	31 July of the assessment year

These are historical statutory dates, not filing deadlines for a current FBT return. Any applicable extension for a particular historical assessment year must be checked separately.

How interest was calculated

Interest = (FBT assessed - advance FBT paid) x 1% x number of months or parts of months of delay.

For illustration, suppose the relevant tax after reduction of advance FBT was Rs. 50,000 and the delay counted as three months or parts of months. The illustrative interest would be Rs. 1,500 (Rs. 50,000 x 1% x 3). Actual historical computations depend on the relevant dates, assessment figures and statutory adjustments.

Section 115WD: Return of fringe benefits, applicable due dates and notices for non-filing.
Section 115WE: Assessment and determination of fringe benefit tax.
Section 115WF: Best-judgment assessment where filing or compliance requirements were not met.
Section 115WG: Assessment or reassessment of fringe benefits that escaped assessment.
Section 115WJ: Advance tax payable on fringe benefits under the former regime.
Section 234A(2)-(4): Related interest-adjustment rules incorporated by Section 115WK, to the extent applicable.
Section 115WM: Chapter XII-H does not apply to assessments for AY 2010-11 or subsequent assessment years.

Why Section 115WK is no longer a current FBT compliance requirement

The Finance (No. 2) Act, 2009 inserted Section 115WM, ending the application of Chapter XII-H for assessments commencing on 1 April 2010 and later. Accordingly, the late-return interest mechanism under Section 115WK relates to the former FBT system. Historical disputes, records or assessments must be evaluated under the law and limitation rules relevant to the period concerned.

The Income Tax Department's 2025 legislative section-mapping navigator also classifies Section 115WK as redundant rather than mapping it to an equivalent provision of the Income-tax Act, 2025. This does not remove the need to assess any legally subsisting historical matter under applicable saving or transitional provisions.

Official legislation and references

Frequently asked questions

What was the rate of interest under Section 115WK?

Simple interest at 1% for each month or part of a month of delay, calculated on the specified FBT amount after reduction of advance FBT paid.

Does Section 115WK apply to current FBT returns?

No. The FBT chapter ceased to apply from AY 2010-11 under Section 115WM.

Is Section 115WK the same as Section 234A?

No. Section 115WK specifically concerned late returns of fringe benefits. Its sub-section (2) incorporated certain rules in Section 234A by reference.

Editorial note: This page describes the historical statutory position and is not a substitute for case-specific legal advice.