This article was published on Financial Express. Read the original article here.
It’s that time of the year now when most of the salaried individuals have tax saving on top of their mind. Some of them are probably scurrying around right now, in an all-out attempt to get their investment bills and receipts together. Income tax declarations made to one’s employer last year are now calling to collect the original proofs. In the corporate circle, it’s commonly known as the investment proof submission season. It’s when employees interested in saving tax through benefits such as fuel, phone, books & periodicals, leave travel allowances and many others need to show proof of these expenses they made through the year.
In most companies in India, employees are expected to submit their bills and receipts through a process that’s almost singularly paper-based. In fact, according to an employee benefits survey conducted by Nielsen India, it was found that 90% of companies in India still used the paper-based method. That’s quite an alarming number, even if you don’t consider the fact that these companies may have seen technological progress in many other areas.
There are now smartphone apps that can replace much of the cumbersome, inefficient processes of the older way of distributing, spending and claiming employee benefits.
Notwithstanding those facts, it’s common knowledge of course that income tax has always been the subject of great speculation amongst young people starting out their careers. Even by more experienced employees, it’s usually approached with guesswork and sometimes, great confusion.
In such an environment, during investment proof submission season and income tax filing season, there’s bound to be a feeling of uneasiness that takes over the workforces at large. It’s never been clearer that outside help is needed. It’s never been clearer that a change was needed; a different way of solving an old problem.
That change has started to take place steadily. There are now smartphone apps that can replace much of the cumbersome, inefficient processes of the older way of distributing, spending and claiming employee benefits.
At the heart of most of these services is cloud technology, and payment modes such as a physical card and smartphone app. The allowances are credited in the employees’ accounts, which can then be used and managed via their smartphone apps.
The benefit for the end-user is simply that they receive their credits digitally, they can spend these, and upload their bills and proofs and claim directly within the app. There’s no need for saving paper bills endlessly and filling out paperwork at crucial times of the year. The emotional benefit is quite clearly that it assures employees a way out of the arcane paper method. On the other hand, the financial benefit is that they’ll possibly never miss out making claims again. That’s indeed a strong motivating factor to opt in.
Going deeper, the financial benefits are quite substantial. For instance, if one considers popular tax benefits such as meal, fuel, phone, leave travel, books & periodicals, gift vouchers and gadget allowances, then the annual savings can be up to Rs 80,000. This saving is over and above Rs. 1.5 lakh that Section 80C allows.
As a part of attracting and retaining talent, human resources departments of companies offer these benefits to the workforce, and now steadily they’re shifting from a paper-based method to an app-based process. The advantages of using the digital option aren’t limited to the workforce alone. There are plenty of reasons why the new way is easier and more inexpensive for HR to consider as well. All an employee needs to do is contact their HR department and enquire with them about the options on offer.