Section 271FB: Penalty for Failure to Furnish Return of Fringe Benefits
Section 271FB prescribed a penalty of Rs. 100 per day where an employer failed to furnish a fringe benefits return within the period required under Section 115WD(1). The fringe benefit tax regime ceased to apply from assessment year 2010-11, so this provision is chiefly relevant to historical compliance and disputes.
What is Section 271FB of the Income-tax Act?
Section 271FB dealt with an employer's failure to file a return of fringe benefits by the due date specified in Section 115WD(1). The Assessing Officer could direct payment of a daily penalty for the continuing default.
Fringe benefits referred to benefits and facilities covered by the former employer-level fringe benefit tax provisions, including the deemed fringe benefits described in Section 115WB. The reporting obligation arose under Chapter XII-H, which governed fringe benefit tax.
Section 271FB: Statutory wording and explanation
"If an employer, who is required to furnish a return of fringe benefits, as required under sub-section (1) of section 115WD, fails to furnish such return within the time prescribed under that sub-section, the Assessing Officer may direct that such employer shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues."
The operative elements were:
- Person liable: an employer required to furnish a return of fringe benefits.
- Reporting duty: Section 115WD(1) required the relevant fringe benefits return.
- Default: failure to file within the statutory time.
- Amount: Rs. 100 for each day the failure continued.
- Authority: the Assessing Officer could direct payment of the penalty.
Unlike a one-time fixed sum, the amount increased with the number of days of default. Whether a penalty could lawfully be imposed in a particular historical case depends on the assessment year, facts, procedural requirements and applicable limitation rules.
Legislative history and present relevance
| Period or change | Legal significance |
|---|---|
| Finance Act, 2005 | Introduced the fringe benefit tax framework, including Section 271FB, with Section 271FB effective from 1 April 2006. |
| Assessment years 2006-07 to 2009-10 | Fringe benefit tax and the related return-filing requirements were relevant, subject to the law applicable for the particular year. |
| Finance (No. 2) Act, 2009 | Discontinued fringe benefit tax from assessment year 2010-11. |
| From assessment year 2010-11 | No ordinary annual FBT return is required under the discontinued regime; historical obligations and proceedings must be assessed separately. |
| Income-tax Act, 2025 (effective 1 April 2026) | The new statutory framework does not revive the former FBT return or Section 271FB daily penalty. Historical matters remain subject to applicable savings and transitional provisions. |
Discontinuation of the FBT regime should not be confused with the taxation of employee perquisites under other provisions. Those rules are distinct from the former employer-level FBT return.
Illustrative penalty calculation
Suppose an employer was required to file a fringe benefits return for a year when the FBT regime applied and filed it 45 days late. The amount calculated under the historical Section 271FB rate would be:
45 days x Rs. 100 = Rs. 4,500.
This is an illustration of the statutory daily rate, not a statement that such a penalty is automatically payable today. Any historical demand must be evaluated against the applicable procedural and substantive law.
Section 271FB compared with other return-filing provisions
| Provision | Subject |
|---|---|
| Section 115WD | Former requirement to furnish a return of fringe benefits. |
| Section 271FB | Former daily penalty for late filing of that return. |
| Section 271F | Historical penalty for failure to furnish a return of income; not applicable for assessment years beginning on or after 1 April 2018. |
| Section 234F | Late-filing fee for certain income-tax returns under the applicable statutory conditions; distinct from FBT. |
| Section 271FA | Penalty concerning statements of financial transactions or reportable accounts, not fringe benefits returns. |
Frequently asked questions
What was the penalty under Section 271FB?
The Assessing Officer could direct an employer to pay Rs. 100 for every day of delay in furnishing the return of fringe benefits required by Section 115WD(1).
Is fringe benefit tax payable for current assessment years?
No. The fringe benefit tax regime was discontinued from assessment year 2010-11. Section 271FB is therefore principally of historical relevance for years when a fringe benefits return was required.
Who had to file a fringe benefits return?
An employer covered by the former fringe benefit tax regime and required to file under Section 115WD(1).
Was the Rs. 100 amount a one-time penalty?
No. The statutory amount was Rs. 100 for each day during which the filing failure continued.
Does Section 271FB apply to ordinary income-tax returns?
No. It concerned returns of fringe benefits, not ordinary returns of income.
Official legislation and further reading
For the operative wording for a historical assessment year, consult the relevant version of the statute and amendments. Official resources include:
- Income Tax Department - Income-tax Act
- India Code - Central Acts and amendments
- Income Tax Department e-Filing portal
- Income Tax Department - Finance Acts
This article is general legal information, not case-specific advice. For an older penalty notice, verify the relevant assessment year, filing obligation and statutory notices.