new delhi although fm chidambaram on monday some aspects of the fringe benefit tax fbt the corporates are still critical about it employers will have to pay an effective tax of 30 per cent as the taxable value of the contribution to employees superannuation fund to will be 100 per cent worse still there will be double taxation as the employee too will be taxed if he withdraws these funds before retirement said amitabh singh partner earnst young the amendments have also not addressed the issue of taxing the benefits provided by the employer in the form of free or concessional tickets for its employees private journeys even after the amendments these benefits will be taxed at 30 per cent in the hands of employers singh said that if this benefit is given in the form of leave travel allowance lta it should not be taxed but this is not clear in the amended finance bill in this scenario a company will deduct the tax before giving the lta benefit to its employees he said according to the original budget provision in the case of telephone use by employees at office or home only 10 per cent of the bill paid by the employer was to be treated as fbt on this the employer had to pay 30 per cent tax thus the effective rate was only 3 per cent but in the amendment the finance minister doubled the value of fbt to 20 per cent of the expenses incurred the effective tax rate would now be 6 per cent singh said that the benefit would not limited to only the bill paid by the employer for the telephone used by employees at their residences but would also include the bills for telephone connections at the companies premises while mobiles were not included in the original proposal fm has now brought them too in the fbt net in the conveyance tour and travel section amendments have given sops to software pharma and construction firms by reducing the taxable value of benefits to 5 per cent from 20 per cent of the expenses this means the effective rate has been cut from 6 per cent to 15 per cent other sectors have been left high and dry tax consultant of pwc ajay kumar said this would increase burden on almost all the companies as tour and travel is integral part of most business activities in sales promotion government has exempted some of the categories like advertisements in print electronic media or sponsorship of sports events