1 in 4 employees DOES NOT understand tax savings options

( Read 6303 Times)

09 May, 18 15:14
Share |
Print This Page

Udaipur : A recent survey has found that one in every four salaried employees in the taxable bracket is not aware of the tax savings potential offered by some employee tax benefits that form part of their respective salary.
The Zeta Employee Benefits Study* commissioned to Nielsen India, among 194 corporates and 1233 employees across 7 cities, takes an in-depth look into employee tax benefits and its current state in India. The survey also reveals that among the employees that opt out of reimbursements, 56% of them do so for higher in-hand salary, thereby not using the full potential of the tax benefits offered to them.
Employee tax benefits are tax saving benefits offered by companies to salaried employees as part of their CTC. These include reimbursements for fuel, telephone usage, LTA, gift vouchers and so on.
According to the survey, which covers 194 companies and 1233 employees across the country, telecom reimbursement is the most popular tax benefit offered by companies, followed by fuel and LTA and Gadget reimbursement. However, 94% of companies still use complex and time-consuming paper-based processes when it comes to managing employee tax reimbursements.
62% employees surveyed said the claim submission process is time-consuming. The survey found that an employee spends an average 23 minutes just to submit a single bill claim and 41% employees need to submit one claim form per claim. While on the corporate side, close to 47% companies claim managing paper bills, especially illegible and invalid ones is their biggest challenge. In fact, 71% of companies take 8 days or more to process each claim, with some taking even more than 2 weeks.
“The administration of employee benefits in India is lagging behind in many ways. The survey ratifies our belief that employees waste a lot of their productive time in mundane activities like storing bills, submitting paper-based claims.” said Ramki Gaddipati, CTO and Co-founder, Zeta. “Only 6% of companies in India use a completely digital process for reimbursements. Due to the complex time-consuming paperwork, many employees prefer to opt out of the benefit because they are not able to derive value for the benefit.” .
Two in every three companies surveyed feel the time and cost spent on managing tax benefits exceed actual benefit to employee. The survey that spoke to HR managers across industries states that 81% of companies have a dedicated team in-house to manage reimbursements and the average team size across industries is around 6 people. Due to high running costs and logistics management, 35% corporates claim to have discontinued one or more reimbursement programmes.
Need of the hour
Most employees do not understand or see the value of the benefit and the potential of savings it could offer. It is perceived that opting out of tax benefits leads to a higher in-hand salary. This mindset needs to change for a mature approach towards savings. It is also critical to make the process of availing benefits easy and less cumbersome so that the time and cost spent by companies and employees towards administering these benefits is justified.
100% of the employees interviewed during this survey owned a smartphone and had access to the internet on a daily basis. 90% employees said they prefer a fully digital reimbursements process. This is a stark contrast to the fact that only 6% of all companies surveyed provide it. The precedent is already there. India has the fastest growing smartphone market in the world. This is a call to action for companies that haven’t switched to digital tax benefits yet. When the majority workforce in India prefers a digital process, then there’s no good reason to not follow through, considering such services and platforms do exist in the market.
Sharing his thoughts on the report Bhavin Turakhia, CEO and Co-Founder, Zeta said, ‘’90% employees prefer digital claims over a paper-based process. With India changing gears to become a more digitally-driven nation, the way we run our organisations also needs to change. Although we have several employee benefits in place, the lack of digitisation is an area of concern given the fact that we have a young tech-savvy workforce in the country. Most importantly, a digital transition will ensure faster processes, significant cost savings for companies and transparent functioning.”

यह खबर निम्न श्रेणियों पर भी है: Busniess News
Your Comments ! Share Your Openion