(2)The fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely:-(A)entertainment;(B)provision of hospitality of every kind by the employer to any person, whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade but does not include-(i)any expenditure on, or payment for, food or beverages provided by the employer to his employees in office or factory;(ii)any expenditure on or payment through paid vouchers which are not transferable and usable only at eating joints or outlets;(iii)[ any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfills such other conditions as may be prescribed;] [ Inserted by Act 18 of 2008, Section 25 (w.e.f. 1.4.2009).](C)conference (other than fee for participation by the employees in any conference).Explanation. - For the purposes of this clause, any expenditure on conveyance, tour and travel (including foreign travel), on hotel, or boarding and lodging in connection with any conference shall be deemed to be expenditure incurred for the purposes of conference;(D)sales promotion including publicity:Provided that any expenditure on advertisement,-(i)being the expenditure (including rental) on advertisement of any form in any print (including journals, catalogues or price lists) or electronic media or transport system;(ii)being the expenditure on the holding of, or the participation in, any press conference or business convention, fair or exhibition;(iii)being the expenditure on sponsorship of any sports event or any other event organised by any Government agency or trade association or body;(iv)being the expenditure on the publication in any print or electronic media of any notice required to be published by or under any law or by an order of a Court or tribunal;(v)being the expenditure on advertisement by way of signs, art work, painting, banners, awnings, direct mail, electric spectaculars, kiosks, hoardings, [bill boards, display of products] [ Substituted by Act 22 of 2007, Section 38, for certain words (w.e.f. 1.4.2008).] or by way of such other medium of advertisement; [* * *] [ Certain words omitted by Act 21 of 2006, Section 28 (w.e.f. 1.4.2007).](vi)being the expenditure by way of payment to any advertising agency for the purposes of clauses (i) to (v) above;(vii)[ being the expenditure on distribution of samples either free of cost or at concessional rate; and] [ Inserted by Act 21 of 2006, Section 28 (w.e.f. 1.4.2007).](viii)[ being the expenditure by way of payment to any person of repute for promoting the sale of goods or services of the business of the employer,] [ Substituted by Act 22 of 2007, Section 38, for Clause (vii) (w.e.f. 1.4.2008).]shall not be considered as expenditure on sales promotion including publicity;(E)employees welfare.[Explanation. - For the purposes of this clause, any expenditure incurred or payment made to-(i)fulfill any statutory obligation; or(ii)mitigate occupational hazards; or(iii)provide first aid facilities in the hospital or dispensary run by the employer; or(iv)provide creche facility for the children of the employee; or(v)sponsor a sportsman, being an employee; or(vi)organise sports events for employees, shall not be considered as expenditure for employees' welfare;](F)conveyance [* * *] [ Certain words omitted by Act 21 of 2006, Section 28 (w.e.f. 1.4.2007).](G)use of hotel, boarding and lodging facilities;(H)repair, running (including fuel), maintenance of motor cars and the amount of depreciation thereon;(I)repair, running (including fuel) and maintenance of aircrafts and the amount of depreciation thereon;(J)use of telephone (including mobile phone) other than expenditure on leased telephone lines;[* * *] [ Clause (K) omitted by Act 18 of 2008, Section 25 (w.e.f. 1.4.2009).](L)festival celebrations;(M)use of health club and similar facilities;(N)use of any other club facilities;(O)gifts; and(P)scholarships;(Q)[ tour and travel (including foreign travel)] [ Inserted by Act 21 of 2006, Section 28 (w.e.f. 1.4.2007).].
