Your petrol, diesel expenses can help you save tax in just few clicks: Here's how
Either be fuel allowance, car allowance, fuel expense reimbursements, fuel benefits they all have some sort of tax benefits.
Employers offer various benefits to their employees. The intention of giving these allowances and reimbursement is to reduce taxes which salaried employees pay from their monthly gross income. Most common benefits include leave travel allowance, fuel allowance, mobile and internet allowance, gadget allowances, meal vouchers and gift vouchers, among others. But not many are aware that even your petrol, diesel purchase can help you save taxes. Either be fuel allowance, car allowance, fuel expense reimbursements, fuel benefits they all have some sort of tax benefits.
Ramki Gaddipati,co-founder & CTO, Zeta said, “An organization can win over their people with one of the most popular and most-used tax-saving benefits -- fuel allowance for employees that will help them save Rs 12,000 annually. Typically identified as fuel allowance, car allowance, petrol allowance, fuel reimbursement for employees by corporate organisations is defined under the Income Tax guidelines as motor car allowance/perquisite.”
The fuel or petrol allowance is offered to employees who drive company-owned or personal vehicle for work-related travel.
PNB Gilts hits 52-week high; banks, AMCs rise too as JPMorgan announces it will include India in EM debt index
India vs Australia Free Live Streaming: When and How to Watch IND VS AUS 1st ODI Match Live on TV, Mobile Apps Online
According to Gaddipati, fuel employee benefit is offered to employees as part of the salary structure. It means employers can choose to introduce this benefit without any additional cost-to-company (CTC). The fuel benefit is offered as a tax saving component which includes a driver’s salary, too.
Further, the Zeta CTO highlighted that, employees can claim these expenses by submitting receipts and get a reimbursement on the same. The way fuel reimbursement is structured is: employees get a full tax exemption to the extent of the receipts submitted. Employees can save up to 30% in taxes on the billed amount. And, if they happen to miss their receipt submission, employees will get taxed to the expense amount.
Interestingly, Gaddipati also emphasized the importance of digitalization for claiming fuel allowances. Note that the Income Tax office will check claims made in real time. Thus, it’s important for your employees to know that they can claim only what is legally entitled to them. And, for this, they need to retain all necessary receipts or credit card statements to support them. Now with this comes the daunting task of checking, managing and maintaining all employee receipts, so that nothing is out of place and everyone receives their share. A simple solution to this is digitising fuel reimbursements for employees.
Digital change begins with people. It’s a strategic transformation that helps businesses and it’s people from the ground up. Here’s a look at the core elements of digital claims, as per Gaddipati.
1. Speed and agility
You can automate all the processes related to fuel or petrol claims and send grants to your employees instantly. All you need is to go through a few clicks on the app before completing the process.
2. On the cue
Customise your fuel claims to meet the compliance requirement and your company’s policies. You can also define how you would like your employees to spend the fuel claims -- whether it’s against next fuel fill-up or any other purchases.
3. Intelligent offering
In today’s dynamic work environment, good employee experience is key. This includes convenience, speed, ease and suitability. And, digital claims will help you address all of these requirements. It’ll not only ease processes, but also help in achieving the desired outcome by bringing all fuel claims -- petrol allowance, vehicle maintenance and driver’s salary -- under one digital platform.
4. Automated processes
Use technology to automate critical processes such as keeping up with audits, managing multiple vendors offering different benefits under one platform, and more.
With digital platforms, you can receive regular audit updates, track employee spends, manage vendors and more within just a few clicks. And, of course you can do all this by going Paperless, and without any manual intervention.
It’s given that businesses today have to innovate to stay relevant to these consumers, and more importantly to its employees. You can't be old-school and have them fill out forms. This generation has come up ordering and processing their everyday lives on apps. And, if the services at work don't match up to this, chances are that employees will move on. Also, in adopting this digital change at work, there is an opportunity.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
Retirement Planning: This small finance bank offers up to 9.5% interest rate on FDs to senior citizens, check details
SBI Retirement Benefit Fund: This SBI fund has given more than 20% return since its launch, check details
Noida Traffic Police Advisory: Roads open and close in New Delhi, Noida and Greater Noida during International Trade Show and Moto GP
PM Modi to visit Varanasi on September 23; to lay foundation of cricket stadium, inaugurate Atal Awasiya Vidyalayas