Zomato expects Rs 40 Cr tax refund to its delivery partners

Zomato has enabled Income Tax Return (ITR) filing for its delivery partners to get refunds on the 1% TDS (tax deducted at source) on delivery payouts.

Within 48 hours, more than 1 lakh riders have initiated their ITR (income tax return) filing on its partners app, Zomato co-founder Deepinder Goyal said on X.

Goyal disclosed that Zomato paid a total of more than Rs 4,000 crore to its delivery partners last year. This would roughly translate into Rs 40 crore as the TDS amount. So, delivery partners who have their income below the taxable income limit will be eligible for the refund. This is likely to apply to the majority of the delivery partners.

Last year, the government directed businesses like Zomato and Swiggy to deduct 1% as TDS from the delivery partner payouts.

“With this initiative, most of our delivery partners will be filing taxes for the first time in their lives, which should make their lives easier in the long run – for example – they will be able to get access to structured credit, they will qualify for scholarships for their kids at various educational institutions, etc,” said Goyal.

The ITR filing by Zomato’s riders is a progressive move for the gig economy and government. Besides opening access to formal credit, TDS collection will also give income to the state’s exchequer. According to experts tracking gig economy, more players will now start TDS collection which eventually will provide income to the state’s exchequer.

Such policy by the Gurugram-based firm makes sense as the company’s capitalization recently crossed Rs 2 lakh crore. The record jump in its share price also pushed Goyal into the billionaire club.

Separately, Zomato received a Goods and Service Tax (GST) demand notice in Karnataka.  The total amount includes Rs 5 crore in GST, along with Rs 3.93 crore in interest and Rs 50.2 lakh in penalties. Zomato, however, is appealing against the order before the appropriate authority.