As we move from a savings-first nation to a credit or spending-first nation, the government has encouraged the citizens to increase purchases as per the new tax regime. This opens up a whole set of changes you need to make in your payroll system, as a people leader.
Emphasis on Purchase
The budget has relieved taxpayers big time, by bringing down the tax rates massively, for all slabs. Truth is, now, as a taxpayer you have to pay less tax than you did before, with or without investments. You don’t need employees’ investment proofs to calculate tax.
Deductions to Consider
The 6 tax slabs before have been merged into 5, with the 25% slab being removed altogether. For all persons earning below the threshold of INR 7,00,000/- per year, no tax will be levied. The additional standard deduction, which is the specific amount that’s reduced from your employees’ total taxable income year after year, is INR 50,000/- and your employees don’t have to submit any proof to claim the standard deduction.
All these benefits will be applicable if an employee chooses to follow the new tax regime.
Furthermore, as an employer, if you are contributing to your employees’ NPS account, your employees can claim up to 10% of their yearly salary for a tax deduction and not more than that.
Changes to Make in Your Payroll System & How FlexiEle Can Help
As employers of salaried professionals, you need to take cognizance of changes newly hauled in and make them to your payroll system, to give your employees the most benefit.
Tax Calculation Logic Under the New Tax Regime
Since your tax calculation logic was different and needs to be revised starting April 1, 2023, you need to make workflow changes since Insurance, PPF, mediclaim and housing loan rebates will not be considered anymore. Hence, your payroll system needs to incorporate direct tax calculation after standard deduction for each tax slab.
Tax Slab Realignment
With the removal of the 25% tax slab, your tax slab categorisation needs to change, along with the necessary deduction percentages and related protocol.
How Can FlexiEle Help?
As a leading HR tech brand, we have a track record of implementing our versatile payroll module successfully in numerous startups and large conglomerates in India, the Middle East and South Asia.
The common feedback we receive from clients is that we are 100% accommodative of your payroll system, no matter how many grades and bands of employees you have, or calculate salary using complex logic and formula.
We focus on employee experience using an efficient ESS (Employee Self Service) portal, that enables your people to manage their investments, claims, form 16 and other returns.
In the FlexiEle payroll module, your employees can choose the tax regime (old or new) they’d like to follow and also download detailed tax sheets from their ESS portal month after month.
So, fret not that you need to implement all budget-driven changes to your payroll. Choose FlexiEle now, get seamless data migration done and start afresh with an advanced payroll module from the new financial year!
Head to https://flexiele.com/ right now and get in touch with our team!