Mumbai: One in every four salaried professionals is not aware of the tax savings potential offered by some tax benefits that form part of their salary breakup, according to a survey.
Among the employees that opt out of reimbursements, 56 per cent of them do so for higher in-hand salary, thereby not using the full potential of the tax benefits offered to them, the Zeta employee benefits survey commissioned to Nielsen India said on Tuesday.
Employee tax benefits are tax saving benefits offered by companies to salaried employees as part of their cost to company (CTC). These include reimbursements for fuel, telephone usage, leave travel allowance (LTA), gift vouchers, among others.
The survey, conducted among 194 corporates and 1,233 employees across seven cities, found telecom reimbursement as the most popular tax benefit offered by companies, followed by fuel and LTA and gadget reimbursement.
However, about 62 per cent employees surveyed said the claim submission process is time-consuming and an average 23 minutes is spent just to submit a single bill claim. The survey found 94 per cent of companies still using complex and time-consuming paper-based processes when it comes to managing employee tax reimbursements.
In fact, 71 per cent of companies were found taking eight days or more to process each claim, with some taking even more than two weeks.
“The administration of employee benefits in India is lagging behind in many ways. We believe that employees waste a lot of their productive time in mundane activities like storing bills, submitting paper-based claims,” said Ramki Gaddipati, chief technology officer and co-founder, Zeta.
Only 6 per cent of firms in India use a completely digital process for reimbursements, according to him. “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,” Gaddipati added.
Two in every three companies surveyed felt the time and cost spent on managing tax benefits exceed actual benefit to employee.
Due to high running costs and logistics management, 35 per cent corporates claim to have discontinued one or more reimbursement programmes.
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Source: News18