Employees often opt for the old tax regime, even when it doesn’t benefit them. This leads to them overpaying taxes. One area that can clearly help employees save taxes is the flexi-benefits structure. Yet it is overlooked by many. Most default to cash-in-hand salary components. This means higher tax liabilities, and lower take-home pay. In such cases, employees end up overpaying taxes by tens of thousands. As the HR Head or the Finance Head, you wouldn’t want that to happen to your employees.
Let’s understand how digitized flexi-benefits solutions are helping India’s workforce save money.
Why Tax-Saving Opportunities Are Being Missed
Many salaried professionals in India don’t optimize their income for tax efficiency. Either they don’t know how, or the company doesn’t provide the tools to do so. Employees make critical tax filing errors such as misunderstanding tax slabs and available deductions or failing to maintain proper documentation, which leads to missed opportunities and unnecessary tax outgo. This includes exemptions on meal vouchers, fuel reimbursements, telecom allowances, and learning benefits.
Traditional reimbursement processes, like submitting bills, chasing approvals, waiting for reimbursements, and such, act as a deterrent. So employees forgo claims altogether. In the long run, this adds up to significant tax leakage.
Case in Point: The Forgotten Allowance
At a financial services company in Hyderabad, Priya, a sales associate, hadn’t claimed her telecom allowance in months. Why?
“I thought it was only for team leads,” she said. “No one told me it was part of my package.”
When HR reviewed the situation, they found over 120 employees had similar unused allowances. These unclaimed benefits were not just costing employees their rightful savings but were also inflating the taxable salary figures for the organization. This exercise consumed an entire day.
Are your employees missing out on tax-saving benefits?
Zaggle SAVE streamlines flexi-benefits to help save taxes.
Flexi Benefits Are the Smartest Tax Move HR Aren’t Using Enough
At a mid-sized industrial tools manufacturing company in Pune, the HR team rolled out a generic salary revision package for the entire staff after annual appraisals. Everyone got an increment. But six months later, the finance team noticed something odd. Net take-home salaries hadn’t improved as much as expected.
Why?
Because the increased income pushed several employees into higher tax brackets. And without optimized benefits, a large portion of that increment went straight to taxes. This is where flexible benefit structures can make a decisive impact. Instead of treating allowances like afterthoughts, organizations can redesign CTC components to include pre-tax exemptions across categories like:
- Meal expenses
- Travel and conveyance
- Fuel and vehicle maintenance
- Learning and development
- Communication reimbursements
These are legitimate tax-saving tools recognized under Indian tax laws.
With a digital platform like Zaggle SAVE, HR teams can define eligibility, customize allocations by grade or role, and load benefits onto a single digital card. Employees get an intuitive dashboard showing their exemptions and potential savings in real time.
Learn about the 5 reasons why companies are switching to flexi benefits.
According to Deloitte’s 2023 Human Capital Trends Report, companies using structured flexi-benefit programs see up to 15–18% higher employee retention and 20% better cost-to-company efficiency.
Flexibility doesn’t just mean more options, it means more value for both the employee and the employer.
Real-Time Control Means Real-Time Savings
Many companies treat tax planning as a once-a-year exercise. But without ongoing visibility, most employees only realize missed opportunities at the end of the financial year. By that time it’s already too late.
Consider Rahul, a senior analyst at a pharma research firm in Navi Mumbai. He submitted his investment declarations in April, chose not to claim fuel or LTA mid-year due to unclear policies, and by March, he had overshot his TDS.
With a digitized solution like Zaggle SAVE, companies get real-time visibility and control, which leads to savings for employees. Real-time tax optimization is impossible with static spreadsheets, delayed communication, or scattered claims processes. With Zaggle SAVE, employees can:
- Get alerts before they miss claiming any allowance
- See the tax impact of benefits claimed as it happens
- Modify preferences and reallocate unused benefits where possible
And for HR teams, this means fewer year-end queries, better compliance, and an empowered, financially-savvy workforce.
Don’t let tax planning wait till March
Zaggle SAVE helps employees make smarter financial choices all year long
Save taxes in real-time Now!
How Flexi Benefits Power Better Tax Planning
With the right employee benefits program, companies can help employees legally and efficiently reduce their tax burden. Flexi benefits are:
- Customizable: Meal, fuel, internet, books, gadgets – choose based on use.
- Exempt from tax: When processed under relevant IT rules, they reduce taxable income.
- Digital-first: Cards and dashboards make usage easy and transparent.
For example:
- ₹3,000/month meal vouchers can save up to ₹10,800/year in taxes
- ₹2,400/month fuel benefits = ₹8,640/year saved
- ₹1,000/month telecom = ₹3,600/year saved
For mid-level professionals, this can result in annual savings of ₹20,000–25,000 easily.
Read to know more about how you can boost employee savings with a flexi-benefits plan.
Why Zaggle SAVE Makes Flexi Benefits Actually Work
The challenge isn’t in creating allowances. It’s in getting people to use them. That’s where Zaggle SAVE comes in:
- All benefits are loaded into one RBI and IT-compliant card
- Employees use the card at any Visa/RuPay merchant, online or offline
- Mobile app tracks balances, limits, and transactions
- Employers define caps and eligibility
- No paperwork, no ambiguity, no delays
This isn’t just tax-saving. It’s financial empowerment. The cherry on the icing is that compliance is in-built. With Zaggle SAVE, audit teams needn’t scramble for Excel sheets, email chains, and hard copies. Every benefit disbursal is:
- Logged and timestamped
- Policy-aligned and role-specific
- Exportable in one click
- Ready for audits or internal review
Make Tax Planning a Benefit, Not a Burden
In today’s volatile hiring environment, employee satisfaction isn’t just about CTC – it’s about how much that CTC delivers in-hand. Tax planning for salaried employees should be frictionless, not frustrating. With a modern employee benefits program like Zaggle SAVE, employers help teams keep more of what they earn. They build trust, reduce attrition, and enable smarter financial choices for every role.
Your workforce deserves more than generic pay slips. They deserve benefits that work.
