PUNE: A recent survey conducted by Zeta Employee Benefits Study found that one in every four salaried employees in the taxable bracket is unaware of tax savings options that form part of their salary.
The study commissioned to Nielsen India, covered 194 companies and 1,233 employees across seven cities also revealed that among employees that opt out of reimbursements, 56 pc of them do so for higher in-hand salary, thereby not using the full potential of 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, telecom reimbursement is the most popular tax benefit offered by companies, followed by fuel and LTA and gadget reimbursement. However, 94 pc of companies still use complex and time-consuming paper-based processes when it comes to managing employee tax reimbursements.
62 pc 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 pc companies claim managing paper bills, especially illegible and invalid ones is their biggest challenge. In fact, 71 pc 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 at Zeta.
“Only 6 pc 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,” Gaddipati said.
Sharing his thoughts on the report Bhavin Turakhia, CEO and Co-Founder, Zeta said, “90 pc 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.”
100 pc 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.