As per Section 37 of the Income Tax Act, 1961, expenses that are incurred wholly and exclusively for the purposes of the business are allowed as deductible expenditures for the company. To substantiate the “business use” of any claimed asset, it is imperative that:
- The invoice must be in the name of the employee and supported by appropriate documentation (if any)
In alignment with this, our Gadget Policy requires that all claims be supported with an invoice in the employee’s name(Bill to employee) to establish the asset’s business purpose.
Hence, compliance to the policy is necessary to ensures that:
- Employees are reimbursed for a business-related expenses, and
- The company is able to claim such expenses as deductible business expenditure in compliance with tax regulations.