Zomato Simplifies Tax Filing for Delivery Partners

Food delivery platform, Zomato, has introduced a groundbreaking initiative to streamline the income tax return (ITR) filing process for its delivery partners. This move aims to facilitate the retrieval of refunds on the 1% tax deducted at source (TDS) levied on delivery payouts.

Overwhelming Response

Within a mere 48 hours of the service’s launch, over one lakh delivery partners have commenced their ITR filing process through Zomato’s partner app, as announced by co-founder Deepinder Goyal on X.

Financial Implications

Zomato disbursed a substantial sum of over Rs 4,000 crore to its delivery partners in the preceding year. Consequently, the TDS amount collected would approximate Rs 40 crore. A significant portion of the delivery partners are expected to be eligible for tax refunds as their annual income falls below the taxable limit.

Government Mandate

The impetus for TDS deduction stems from a government directive issued last year, mandating businesses like Zomato and Swiggy to withhold 1% of delivery partner payouts for tax purposes.

Long-Term Benefits

Goyal emphasized the far-reaching implications of this initiative, asserting that it would mark the first foray into tax filing for numerous delivery partners. This newfound financial discipline is anticipated to unlock a range of opportunities, including access to structured credit facilities and eligibility for scholarships for their children.

Positive Impact on Gig Economy

Zomato’s endeavor to simplify tax compliance for its delivery partners is hailed as a progressive step for the gig economy and the government. By formalizing income streams through TDS collection, the initiative is poised to augment the state’s revenue generation. Experts in the gig economy anticipate a domino effect, with other industry players adopting similar practices.

Financial Performance and Tax Dispute

Zomato’s market capitalization recently surpassed the Rs 2 lakh crore mark, propelling co-founder Deepinder Goyal into the billionaire club.

In a separate development, Zomato has received a Goods and Service Tax (GST) demand notice from the Karnataka tax authorities, amounting to a total of Rs 60.43 crore. The company is contesting this demand through the appropriate legal channels.

Zomato’s commitment to its delivery partners, coupled with its financial success, positions the company as a catalyst for positive change within the gig economy and the broader business landscape.