Income Tax: Can I Choose and Declare the New Regime to the Employer?

Update (Apr 13, 2020): Govt of India has clarified that the employee can ask deductor (employer) to consider new tax regime for taxation (provided certain conditions of no-business income, etc. are met). The notification below is just in. Thanks to Ankit Lohiya for updating me about the notification.

Hence, the article below stands void.

In the 2020-21 budget by the Govt of India, a new tax regime was announced. The below table depicts the difference between the old regime and the new regime. HOWEVER, Govt has announced that it will give an option for the citizens to choose which tax regime they would like to be taxed on.

New Income Tax Regime

Source: https://timesofindia.indiatimes.com/

Does that mean I can tell my employer to tax me on which regime?

As it looks, your employer cannot take such an option from you to choose which income tax regime they should tax you on.

So, what will the employer do?

The employer will still need to, as of today, continue deducting income taxes per the old regime (like how they used to do during FY 2019-20). They cannot ask, or take a choice from, the employee on which regime to tax on, nor they can tax them other than on the old tax regime.

When can I then choose my tax regime?

The employee can choose the tax regime at the time of his/her Income Tax returns. The IT department will recalculate the income tax and ask you to pay/refund an additional amount.

Why is it that so? Why can’t employers take option from employees?

As per the Finance Act, 2020 which is enacted by the Parliament, taxes are to be withheld and paid to the Government as per Part I of First Schedule of the Act (please see screenshots below).

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No alt text provided for this image

The Government has, in fact, introduced the new tax regime not by altering the Part I of First Schedule above, but instead by introducing the new regime as a new section (Section 115BAC). As long as Part I of First Schedule is changed/amended with the rates mentioned in 115BAC, the employer needs to follow the old regime for TDS.

Can I change choose old regime in the years to come, if I choose the new regime during FY 2020-21 (AY 2021-22) during income tax returns?

No, 115BAC mandates that in case of individuals and HUFs who have income either from a business or a profession, once this option is exercised, they will have to continue with the new regime for that year and all subsequent years.

(with inputs from multiple resources and people, including Sreelal).

Also published at LinkedIn and Medium.

Work From Home Musings

Here’s the snapshot of my WFH experience (though I’ve done it in the past, not as many continuous days as this time).

Work From Home, Working From Home
Image Courtesy: www.entrepreneur.com
  1. Gained weight. I was on a consultant diet for the last three weeks and had lost 3 kgs. Looks like I eat at leisure while at home and gained 2 kgs over the last one week.
  2. I eat my meals on time, but while at the office I am known to procrastinate meals and eat them all together later. However, I drink less water while at home. And I miss pantry talks.
  3. Missing the office AC. The room where I’ve set up my work from home corner is damn hot. Internet at the office was heavenly, too.
  4. Missing my people around, especially the G&A team of FullContact. Meetings having been moved online, I’ve started missing meeting people in real. Added to it, I am in HR.
  5. I fail to switch to work attire though many on the web suggest doing so.
  6. Productivity swings. At times, I am underproductive while productivity soars up sometimes.
  7. Feeling unnaturally sleepy after lunches (while at the office, it doesn’t happen quite often).
  8. Kid at home & Working at home together is a bad idea.
  9. Last but not the least, I am living two more days in a month. I have a two-hour transit daily, multiply that by 24 and you get 48 hours = 2 days!

Why you should NOT celebrate the International Women’s Day with a cooking competition at the Workplace

The International Women’s Day is around the corner, i.e. on March 8, 2020. That being a Sunday, most organisations have decided to celebrate it on the Mon, Mar 9. It’s usual for every HR team to make a plan and celebrate the day certain set of programs and competitions within the office. We do, too, at FullContact. This post is not to talk about what we do, but what one should do.

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(Image courtesy: http://www.durocherflorist.com)

How to?

I have seen many messages by HRs asking for ‘what do you do for women’s day’; so that we can replicate questions. Well, sometimes discussions like these are about sharing ideas, but many a time, they end up being a means to do something on the Women’s Day as an engagement activity (oh boy, a term that has lost its charm!).

Let’s think for a moment. Why do we need to celebrate Women’s Day? Is there a problem that we are trying to address at our organisation? It could be an equality issue. It could be an inclusion concern. It could be a facilities concern that male employees have access to but not women for their gender. Do you have such an issue at the organisation that’s unfair to your women employees? That’s what you should discuss and target to resolve.

Who to?

Usually, HR department takes care of conducting the engagement activity on the Women’s Day. Most organisations have an HRBP structure these days and why don’t we do it not on our shoulder but as a collaborative activity? First and foremost, stop planning the day with the help of male employees alone. They might be missing much of the context as to why we should ‘celebrate’ a day for women employees—why don’t you call in volunteers from among your women workforce to plan, better, a women’s day? They know their problems at the workplace!

What to

What to do on a Women’s Day will vary from organisation to organisation. As I said earlier, your intention should be to celebrate the successes of women, being an inspiration to women in the organisation, AND to try and resolve concerns your women employees have in terms of equality and inclusion.

Events such as cooking competition, best saree wearing competition, etc. are, in my personal opinion, are regressive in nature. A patriarchal society like ours has celebrated such forcefully collocated chores and events to women. As progressive organisations, our intention should not to celebrate and promulgate such practises but to address the issues that are created by such implicit biases.

HRs, think about what you want to do at your organisations. I am sure you will find something better than a cooking competition!

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Still, give me some ideas!

I’ll begin with a few from the list of events that our team discussed Women’s Day Week #SheIsUs at FullContact this time (fully planned and owned by our non-HR members):

  • An AMA session where any questions about inclusion, equality at the workplace is answered and acted upon.
  • Select documentaries on inspirational figures from among women leaders around the world.
  • Inspirational Women stories from among our own members.
  • As part of #FullContactThanks, a day dedicated to thinking about and acknowledging one woman in our members’ lives.
  • Inspirational women leaders having a conversational meeting with the whole of the office where we will try to address some implicit bias issues.
  • Sponsor a girl child program with equal contributions from the organisation and the members.
  • Motivation to go out and be outdoorsy to those who didn’t get a chance to do so—clubbed with #HealthyFullContact.

Second Image Credit: Wikimedia Commons

Also published on LinkedIn and Medium.

Did your employer ever deny the Experience Certificate? Read on.

Indian labour laws are, majorly, employee-centric than employer-centric. Though this is the state of the act, most employees are not aware of their rights per various labour laws of the land. Or else, many employers purposefully do not educate their employees of the latter’s rights at the workplace.

One of the major threats many young professionals face from disgruntled employers is ‘we will not issue the experience certificate unless you do x or y‘. Not issuing an experience certificate is, unfortunately, used by many HRs and management as a tool to get something done by the employee. This something could be repayment of what the employee owes to the company, the employee not serving the notice period, etc.

Another common practice among some SMEs (I must admit that this trend is on a decline now) is to keep the originals of the employee’s certificates and mark lists with them until the term of employment/resignation. This is to make sure that the employee does not look for alternative employment whilst employed at the master organisation. Poor employee, s/he believes that the organisation has rights in their limit to do so and obeys this demand.

As it turns out (and it has always been like that), NO EMPLOYER is entitled to DENY experience certificates (service certificate in legal terms) to an employee or a former employee. If the employee demands such an experience certificate during or after the term of employment, the organisation is BOUND to issue one. To cite the labour law, 2J(3) of Kerala Shops and Commercial Establishments Act, 1961 mandates that the employer shall issue the service certificate in Form BE, within seven days from the receipt of such a request from the employee (every state has its own S&CE Act, and they will have similar provisions).

In a nutshell, employer cannot deny a service certficate (experience certficate) even if the employee is absconding or under a formal domestic enquiry for a gross misconduct. If the employer does not follow the request, the employee has the right to contact the District Labour Officer or the Labour Court thereafter for redressal.

Now, Section 5E of the aforementioned act says:

5E. Prohibition of retaining education certificate or experience certificate.—No educational certificate or experience certificate in original received from an employee shall be retained by the employer of any establishment at the time of appointment or during the course of employment.

This means, no establishment has the right to retain the originals of the experience certificate and/or educational certificates of their employees. Copies, however, can be maintained for record purposes, but originals have to be returned immediately after verification.

Ever denied justice? Talk to your HR first. If they do not fall in line, you now know what to do.

Also published at LinkedIn and medium.

Employee Engagement and College of Engineering Chengannur: An HR Case Study

There’s something between College of Engineering Chengannur and CECians—the students and alumni of the college that binds the duo together. That’s never-ending loyalty and affection of the students and alumni of the college for their alma-mater.

College of Engineering Chengannur is my undergraduate college where I did my Bachelor of Technology in Computer Science and Engineering, and graduated in 2010. During our time, there were less than 220 students in an entire batch all the streams put together. The college was the first Govt. self-financing engineering college in the State of Kerala. When it started in 1993, it was a much sought-after college in the state.

The unique feature of most of the CECians that I have noticed is their affection for the college. The moment when an alumnus in a random crowd happens to say he’s a CECian, the other one in the crowd picks it up promptly and they instantly become family. This feature has helped the students (and alumni of the college) immensely, especially in networking and career prospects. CECians have a thing.

The sole intention of this article is not to ‘market’ my alma mater, but to use it as a case study as to how organisations can learn from it to build a highly-engaged crowd in their teams. There are no numbers since I have not conducted a formal study.

While I think of the reasons why there’s a high grade of the sense of belongingness to the college, it takes me to the fact that there have been a variety of events that happen at the college every year. Thanks to being a government college, most of the events are envisaged, planned and executed by the students alone. This gives them a sense of responsibility, pride and achievement.

Now what an HR should learn from this scenario: there are technical groups, arts club, sports club, National Service Scheme, Nature Club, multiple sports events, stages of art expressions, union senate, etc. In fact, there’s a surplus of forums and activities for a comparatively smaller college like ours.

The above fact has resulted in a very desirable scenario—that each of the students will be part of at least one of the activities/groups. There are exceptions, but on a negligible quantity. At the end of the four-year course, there would be at least an event/activity that every student has volunteered in/participated in.

Employee Engagement Credits: https://unsplash.com
Credits: https://unsplash.com

Students and the college recognise each such successful programs. This adds to the sense of achievement of the students. This ‘boost of pride’ is the sole reasoning for the immaculate belongingness of its students and alumni. That stays for good.

I was coming to it—the lesson an HR can take from this is how s/he should plan the engagement activities in the organisation. It’s imperative that the engagement initiates that the HR department drives at their organisation touch the sentiments of the employees. A wise selection of engagement events will strive to touch the likeness or interests of all employees.

It goes without saying that a single initiative alone cannot attract the interest of all employees. Hence, it is important to know what your employees are interested in. Some of the employees may have a personal interest in painting, some in music and some other in badminton. To the best extent possible, a  good HR engagement practice and design will always have events planned to touch these interests of the employees, at least once in a year. It’s simpler in SMEs, but in larger companies with HRBP concepts implemented, the same ideology can be extrapolated on smaller teams.

Let me close by saying this—the intention is not to create a heat map of the hobbies of your employees and then take the mode of it as the next engagement activity. But the intention is to identify those employees whose sentiments are barely touched and to address them.

How about a deeper analytics on the engagement score vs hobbies of the employees for better insights on what next you should take up as an engagement activity in the company? Will write about it in a few days, but would like to know your thoughts first on what’s written above. Let me know in comments.

Happy HRing 🙂