If the Department of Telecom has its way then you won't have to pay perquisite tax for the smartphones and tablets given for your use by your employer.

The DoT has suggested to the Finance Ministry that tablets and smartphones given by employers should be considered as working tools and not a perquisite for taxation purposes.

Under existing rules, laptops and computers already enjoy this exemption.

“Due to advancement in the technology and launch of 3G by telecom operators in India, companies are providing such 3G-enabled tablets to their employees as working tools in addition to computers/laptops,” the DoT said, as part of its proposals to the Finance Ministry for the forthcoming Budget.

Spectrum charges

The DoT has proposed that telecom companies be allowed to amortise the upfront charges paid for 3G and broadband spectrum.

While this was mentioned under the auction rules, the Income-Tax department has denied the deduction.

To remove ambiguity, the DoT wants the Finance Ministry to clarify that spectrum is an asset and spectrum payment is in the nature of a capital asset, and thus admissible for deductions under the tax laws (Section 35 ABB).

Related to this, the Department has also suggested giving tax breaks to telecom operators that bought 3G and broadband spectrum by allowing them to claim depreciation on the capital expenditure incurred on spectrum fees.

The Department reckons that this will enable operators to make services more affordable.

However, the key issue is how depreciation can be allowed for an intangible asset such as spectrum.

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