The Finance Ministry is contemplating diluting provisions of Fringe Benefit Tax (FBT), by which companies may not have to pay taxes on certain perks and allowances availed of by employees.

Although industry has been pleading for a complete abolition of FBT in the forthcoming Budget, to be presented on July 6, sources said the Finance Ministry is against it because of revenue implications. However, they added the ministry is looking at the possibility of diluting the provisions of FBT and may exclude expenses on various items, which do not directly benefit employees.