I am working in an ecommerce company in India. Recently our payroll partner was changed. Previous payroll partner asked employees to fill a FBP (Flexi Benefit Pay) form in which an employee could fill his/her reimbursement details like how much he wants to actually reimburse.So, for example if I get a monthly telephone reimbursement of Rs. 5000, I could chose to submit bills of Rs. 2000 per month and if I could do this each month, this will also be part of my monthly payout. Rest Rs. 3000 (X 12) will be paid to me at year end. I was not happy with this at all although this was reducing my tax liability by submitting reimbursement bills this was also delaying a significant amount of pay till year end. So my first question is why can't I get the rest of the amount monthly (of-course after deducting tax).
To help people like me, this previous payroll partner used to give an option to 'mark my FBP zero' at the start of the financial year (only once in FY), in which I could say that I do not want any tax benefits and would like to get the complete reimbursement as monthly component rather than an yearly component. In that case they would simply deduct tax and pay me my complete reimbursement. I was a happy soul then that not only I was paying more tax (and I feel good about it) I was getting my reimbursement amount monthly.
Now enters this new payroll partner - They have also given an option to fill a FBP form but the problem is they haven't given an option to 'mark my FBP zero' option. The impact of this is I have lost my big chunk of monthly component as I do not have a habit of submit bills (I am okay with tax being deducted) They have somehow decided to pay my reimbursement at the year end. Is this legal at all ? What are the provisions of income tax or HR guidelines on this ? If I am okay with tax deduction why should employer not pay my reimbursements monthly and hold it back till year end for no reason ? Are they doing this because they warn to earn extra interest on this money ? Can I fight against it ? 29th April 2017 From India, Delhi