Mobile Purchase Reimbursement: How to Handle Tax Implications for Employees?

Hello, I need guidance to understand in case we go for a mobile purchase reimbursement to our employees wherein we will also include the tax that the employee will have to bear. What can be the tax calculation consequence and any other impact that this may have? This would be a one-time payment within the period of 2 years.

Discussing Mobile Purchase and Reimbursement with Employees

Suggest the company discusses the matter with employees, takes their views and company requirements, and decides upon a model. The company can buy in bulk and get a discount. The employee can be made to sign a loan card for the item. Clear rules for the use of mobile phones, reimbursement of monthly expenses, and requirements for monthly bills for recharging, etc., can be framed out. In case of loss of a mobile phone, the cost is to be recovered, and actions to safeguard company information and data, etc., can be considered.

Guidelines for Mobile Usage

Browsing rules can be laid down—rather guidelines requesting employees not to use it for personal emails and general browsing, etc.—use for business purposes only. Bulk purchase is like any business expenditure deductible from the profit and loss account as overheads.