27May

Make Accurate Income Tax Projections with eSSM

Organisations worldwide are adopting Human Resource Management Systems (HRMS) like Spine HR Suite to automate many activities related to human resources, accounting and payroll. Within HRMS, the Employee Self-Service Module (eSSM) allows employees to carry out many HR-related tasks easily. Thus, an eSSM can save companies many labor hours and improve efficiency and productivity. And because an eSSM empowers employees to manage themselves; it can also increase their engagement and accountability.

An eSSM can help employers with income tax projections – a ‘forward-looking’ process that enables them to determine how much money to set aside for future tax obligations. Such projections can help them avoid getting caught off-guard by an unexpectedly high tax bill. They can also avoid penalties for underpayment of taxes.

TDS in India

In India, Tax Deducted at Source (TDS) is levied on salary income. Salaried employees are usually asked to provide their investment documents at the start of every financial year. Based on this statement, the employer estimates the employee’s taxable income and deducts monthly TDS from his salary.

On a quarterly basis, Indian firms have to submit Form 24Q to the Income Tax department with details of salaries and TDS. Such form submissions are mandatory.

eSSM can help with TDS projections – here’s how!

Here are 5 advantages an eSSM offers to help companies estimate income tax liabilities and prepare accurate financial statements and tax returns.

  1. Easy access to employees’ IT declarations

Through eSSM, employees can declare their estimated annual income tax. With this information, employers can estimate their employees’ tax liability and calculate their taxable income. They can then release salaries that are both accurate and fair.

  1. Investment proof documents for accurate projections

Like income tax declarations, employees can also declare their investments at the beginning of the year. Towards the end of the year, they can compare their declaration with ‘actual’ and submit relevant investment documents. Both actions help companies with accurate income tax projections. After employees make these adjustments, applicable TDS can be recalculated and applied.

  1. Processing of reimbursement claims

An eSSM’s Reimbursement feature enables employees to upload claims. Once these claims are processed; depending on the reimbursement type, employees’ TDS liability or exemption is calculated. Thus this information can also help with income tax projections.

  1. one-stop access to payroll data

If the organisation’s HRMS eSSM and payroll systems are seamlessly integrated, payroll departments can see comprehensive and up-to-date payroll data/history in one single, easy-to-use interface for hassle-free TDS projections and calculations.

  1. Better projections through data accuracy

An eSSM puts the onus of data accuracy into the hands of the person who knows their information best – the employee himself. Also, because every employee has a unique login profile with stringent password policies, an eSSM offers enhanced data protection and security which can improve projections.

Spine HR Suite offers all these advantages in a digital interactive interface that minimizes paperwork and empowers employees. To know more about Spine HR Suite or to enquire about a demo, contact us.Share