Thanks to Sushmita Sen, #Metoo Money Will NOT Be Taxed
Sushmita Sen had filed a case of sexual harassment against an employee of Coca-Cola years ago
Thanks to Sushmita Sen, any monetary compensation to a #MeToo victim will not be taxable under the Indian Income Tax Laws. An Income tax appellate tribunal (ITAT) has ruled that compensatory payouts for sexual harassment aren't taxable. This means no tax on monetary compensations under #MeTooIndia. The case was moved by Sushmita Sen who had received INR 95 lakhs as compensation after a senior employee of Coca-Cola India was found guilty of sexually harassing her on the pretext of discussing an advertisement shoot.
Sen had formally lodged a #Metoo complaint with Coca-Cola India and it was investigated by an internal as well as external committee appointed by the company in the year 2003. The employee was let go from the company after an investigation.
In 2004, the company acknowledged that Sen's complaint was true and paid a compensation of INR 95 lakhs for the trauma that she went through in the hands of their former employee.
While filing her income tax returns, Sushmita Sen contended that it was not an income and hence she is not liable to pay tax on the same. The Income Tax authority had initially disagreed with this stand of Sushmita Sen, who next approached ITAT and filed a case.
ITAT has ruled that monetary compensations for sexual harassment are not an income. Hence no tax needs to be paid for it. This order hasn't been challenged and will be applicable to everybody in the corporate and government sectors in India.