Finance Minister P. Chidambaram Monday retained in the finance bill a 30 percent fringe benefit tax (FBT) payable by employers for extending privileges or facilities to employees.

Replying to the debate on the finance bill, he said the proposal to retain the tax had the broad support of most industry chambers.

The FBT will apply on expenses incurred by company on welfare of employees, including contribution to superannuation funds. However, reimbursement towards employees' medical expenses will not attract FBT.

The silver lining is that companies need not pay FBT on expenses incurred due to sales promotions. Also exempted are loss-making firms and charitable institutions.

Facilities like club membership and concessional tickets to employees will attract the new tax. However, expenses on maintenance of cars and expenses on foreign travel by employees will attract only five percent FBT.