Hello all, I am working in an e-commerce company in India. Recently, our payroll partner was changed. The previous payroll partner asked employees to fill an FBP (Flexi Benefit Pay) form in which an employee could fill in his/her reimbursement details, such as how much he or she wants to actually reimburse. For example, if I receive a monthly telephone reimbursement of Rs. 5000, I could choose to submit bills of Rs. 2000 per month. By doing this each month, it would also be part of my monthly payout. The remaining Rs. 3000 (X 12) would be paid to me at year-end. I was not happy with this arrangement at all. Although submitting reimbursement bills reduced my tax liability, it also delayed a significant amount of pay until year-end. So, my first question is, why can't I receive the rest of the amount monthly (after deducting tax)?
Option to 'Mark My FBP Zero'
To assist people like me, the previous payroll partner used to offer an option to 'mark my FBP zero' at the start of the financial year (only once in FY). With this option, I could indicate that I did not want any tax benefits and would prefer to receive the complete reimbursement as a monthly component rather than a yearly component. In that case, they would simply deduct tax and pay me the entire reimbursement amount. I was content with this setup as I was paying more tax (which made me feel good), and I was receiving my reimbursement amount monthly.
Issues with the New Payroll Partner
Now, with the introduction of this new payroll partner, they have also provided an option to fill out an FBP form. However, the issue is that they have not included the option to 'mark my FBP zero.' As a result, I have lost a significant portion of my monthly component because I do not have the habit of submitting bills (although I am fine with tax being deducted). They have decided to pay my reimbursement at year-end. Is this legal at all? What are the provisions of income tax or HR guidelines regarding this? If I am fine with tax deductions, why shouldn't the employer pay my reimbursements monthly and withhold them until year-end for no reason? Are they doing this to earn extra interest on this money? Can I fight against it?
Thank you.
From India, Delhi
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Option to 'Mark My FBP Zero'
To assist people like me, the previous payroll partner used to offer an option to 'mark my FBP zero' at the start of the financial year (only once in FY). With this option, I could indicate that I did not want any tax benefits and would prefer to receive the complete reimbursement as a monthly component rather than a yearly component. In that case, they would simply deduct tax and pay me the entire reimbursement amount. I was content with this setup as I was paying more tax (which made me feel good), and I was receiving my reimbursement amount monthly.
Issues with the New Payroll Partner
Now, with the introduction of this new payroll partner, they have also provided an option to fill out an FBP form. However, the issue is that they have not included the option to 'mark my FBP zero.' As a result, I have lost a significant portion of my monthly component because I do not have the habit of submitting bills (although I am fine with tax being deducted). They have decided to pay my reimbursement at year-end. Is this legal at all? What are the provisions of income tax or HR guidelines regarding this? If I am fine with tax deductions, why shouldn't the employer pay my reimbursements monthly and withhold them until year-end for no reason? Are they doing this to earn extra interest on this money? Can I fight against it?
Thank you.
From India, Delhi
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In India, according to the Income Tax Act, employers have the flexibility to structure reimbursements and benefits as part of the salary package. However, the manner in which reimbursements are processed, whether monthly or yearly, needs to comply with relevant legal provisions and employee preferences.
### Legal Perspective:
- The employer can opt to reimburse expenses on a yearly basis, but this should align with the preferences of the employees and not be in violation of any labor laws or taxation regulations.
- As an employee, you have the right to expect timely reimbursements and clarity on the process.
### Practical Approach:
1. Check Company Policy: Review your company's policy on reimbursements and Flexi Benefit Plans (FBP) to understand the guidelines and procedures in place.
2. Communicate with HR: Initiate a discussion with the HR department to express your concerns and seek clarification on why the reimbursement process has changed.
3. Request for Monthly Reimbursements: If you prefer to receive reimbursements monthly rather than annually, present your case to HR and request for a modification in the reimbursement structure.
4. Seek Legal Advice: If you believe the employer's approach is unfair or violates any regulations, consider seeking advice from legal experts or labor authorities to understand your rights and options.
5. Raise a Formal Complaint: If necessary, escalate the matter through the appropriate channels within your organization or to relevant labor authorities to address the issue.
Ensure to maintain a professional and constructive approach while addressing this issue to reach a satisfactory resolution.
From India, Gurugram
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51### Legal Perspective:
- The employer can opt to reimburse expenses on a yearly basis, but this should align with the preferences of the employees and not be in violation of any labor laws or taxation regulations.
- As an employee, you have the right to expect timely reimbursements and clarity on the process.
### Practical Approach:
1. Check Company Policy: Review your company's policy on reimbursements and Flexi Benefit Plans (FBP) to understand the guidelines and procedures in place.
2. Communicate with HR: Initiate a discussion with the HR department to express your concerns and seek clarification on why the reimbursement process has changed.
3. Request for Monthly Reimbursements: If you prefer to receive reimbursements monthly rather than annually, present your case to HR and request for a modification in the reimbursement structure.
4. Seek Legal Advice: If you believe the employer's approach is unfair or violates any regulations, consider seeking advice from legal experts or labor authorities to understand your rights and options.
5. Raise a Formal Complaint: If necessary, escalate the matter through the appropriate channels within your organization or to relevant labor authorities to address the issue.
Ensure to maintain a professional and constructive approach while addressing this issue to reach a satisfactory resolution.
From India, Gurugram
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