India has one of the biggest IT industries in the world and firms give out freebies to retain the employees
Information technologies and start-ups in India are showering gifts like expensive cars to the employees. Recently, two IT firms in Chennai gave 5 BMW 5-Series and 100s of mass-segment cars like the Maruti Suzuki Baleno to its employees. It does sound good until you sit and do the taxes! Well, here are the details.
5 BMW 5-Series Sedans as gift
On 8th April 2022, the CEO of Kissflow Inc., Suresh Sambandam, informed five senior executives that they have become proud owners of BMW 5-Series luxury sedans. The announcement happened without any prior information, with the senior executives getting the surprise of the lifetime when all the employees gathered for the celebratory event of Kissflow Inc’s 10th anniversary.
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Out of surprise, five units of BMW 530d rolled one by one at the event, accompanied by the family members of all the five senior executives alongside each car. The navy blue-coloured cars got delivered to the five senior executives – Dinesh Varadharajan (Chief Product Officer), Kausikram Krishnasayee (Director of Product Management), Vivek Madurai (Director), Adhi Ramanathan (Director) and Prasanna Rajendran (Vice-President).
What are these challenges?
While handing over the keys to the recipients, Sambandam said that these five senior executives stayed with the company from the beginning and helped the company survive through all the thicks-and-thins. He added that these cars are tokens of appreciation for the loyalty shown by these five men towards the company. Due to the consistent contributions of these executives, the company now owns the stature of a fully private company after paying off the investors. Sambandam himself is a proud owner of a BMW 6-Series.
100 Maruti Suzuki cars gifted by another IT firm
Another IT Software-as-a-Service (SaaS) firm Idea2IT doled out 100 cars to its employees. While these are no BMW but are affordable Maruti Suzuki models that are cheaper to maintain as well.
It includes the new Baleno too
The company said that the company shares its wealth with the employees and it is just a start. In future, the employer wants to give more such gifts including expensive phones and gold coins.
These BMWs are expensive
But there are quite a few tax challenges while receiving cars as gift
The BMW 530d is the range-topping version of the BMW 5-Series midsize luxury sedan. The price BMW 530d is Rs 74 lakh (ex-showroom), which can translate to around Rs 1 crore, on-road. This version of the 5-Series came to India in 2021 and sits above the petrol-powered 530i M Sport and diesel-powered 520d Luxury Line in the 5-Series lineup in India.
The BMW 530d comes standard with the M Sport package, which adds sporty highlights, in and out. The car has a 3.0-litre inline-six B57 diesel engine under its hood that produces 261 bhp of maximum power and 620 Nm of maximum torque. The engine channels the power to the rear wheels via an 8-speed automatic gearbox and features technologies like regenerative braking and an idle start-stop system.
Employees need to pay tax on gifts
Chennai-based Kissflow gifted BMW 5-Series to its employees
In India, employers can gift anything worth Rs 5,000 without worrying about the taxes. However, if the worth of the gift is more than Rs 5,000, the employee will have to file taxes. This can also change the tax slab to the higher one. So if you plan your budget every year, a gift in the form of a car can be unwelcoming.
What is the most expensive gift that you have received from your employer yet? Do let us know in the comments below.
Keyword: IT Firms In India Are Gifting Cars Worth Crores To Employees; Here’s Why