Good day to everyone. Please can you help guide me on the following.
We are planning to introduce new reimbursable components in the salary structure & are thinking of using a Third Party Supplier to help in the backend admin. Eg. Paytm Wallet. So plan is to have 1 Wallet per Employee who in turn will have 3 sub-wallets ie Food, Fuel & Allowance. If this is implemented, then the 3 wallets need to be topped up & the employee will receive less credit in his bank. Please correct if my understanding is wrong.
Question - (a) in Employee Payslip should the money transferred to each of the Wallets be also shown on the Deduction side? (b) If an Employee uses the Fuel Wallet in a Fuel Station to fill up any vehicle ie. his 4 wheeler or 2 wheeler or his friends vehicle, are there any controls whereby an employer can identify such spend and tax for these items. I do understand from earlier POST on Reimbursable Components that the onus is on the Employee to ensure fair declaration, but just wanted to get some thoughts from anyone who is currently using Wallets.
Thank you all in advance for your inputs and suggestions.
Regards
Venkat
Any wallet or coupons you use are all linked to a AADHAR and PAN, which are connected to the same TDS calc.
For example: for 50,000 salaries if you say 5000 will be divided into FBP or reimbursement component, they are still taxable but exempted if necessary bills or process if followed for which company takes the liability to verify the same.
For example: if you use Sodexo (for food, medical, and fuel wallet), the amount you transfer to the wallet is an FBP bucket and henceforth exempted from tax. (irrespective of how much of that an employee used in this FY).
So whether you pay in bank or wallets for us it’s the same TDS, but the difference here is bills/hardcopies are not mandatory to validate as the wallet companies take care of this.
a) It’s up to you to show in monthly payslip but in the majority of cases they are shown in CTC payslip or Separate FBP/Reimbursement payslips as they are directly reduced from CTC for annual TDS calc.
b) no we will not be able to identify for which vehicle it’s filled and tax accordingly, but it’s the employee’s money and he can decide to spend - likely for a food coupon spend it could be his immediate family spending.
Let me know if you have any query.
In general - using a wallet is a good idea as this gives employers an option to introduce FBP helping employees to save tax.
But in the current pandemic there are a lot of questions during auditing - please check with an auditor once before you enable this.