ZAFIN SOFTWARE CENTRE OF EXCELLENCE PRIVATE LIMITED
GUIDELINES FOR FLEXI BENEFIT PLAN (FBP)
INTRODUCTION: Flexi benefit plan or shortly called as FBP is a way of structuring the
remuneration of employees for reimbursement of expenses incurred for performing the official
duties, so as to get the maximum tax benefits within the ambit of the various provisions of the
Income Tax Act and Rules thereon. The components of FBP that employees can choose are
mentioned below in detail. Employees are required to submit proper bills at year end which are
paid during the financial year under each FBP component, in order to avail the tax benefit.
PLAN GUIDELINES:
• FBP YEAR refers to the financial year i.e. from April to March every year.
• FBP BASKET is the total amount of money that an employee can take for the entire year
for all components of FBP.
• FBP ALLOCATION is the process of specifying the amount under each component.
This denotes the amount for the entire FBP year. i.e. the employees must declare the
amount, that he/she will take for the full year. If an employee has joined before the current
FBP year, then he/she will be entitled for the FBP total amount. However, if an employee
has joined/left during any time of the FBP year, then he/she will be paid pro-rata of the
FBP amount depending on the date of joining/leaving.
Employees are required to declare the amount under each category in the FBP basket at
the start of the financial year or during the month of joining. No further changes during the
year is permitted.
• FBP UNCLAIMED is the amount for which the bills / receipts not submitted as proof
for the payments and hence such unclaimed amounts shall be taxable before the end of the
FBP year (during the month of February and March) at the appropriate Income Tax slab
rates.
• Documents (with details of payment date, name and amount) to be submitted in each case is
underlined for your easy reference.
THE PLAN:
1. Vehicle Running & Maintenance Expenses – Rule 3(2)
• The eligible amounts are as under: -
In case of motor car cubic capacity is 1.6 litres and less, the employees can claim and
submit bills for Rs.1,800/-p.m. or Rs.21,600/-p.a.
In case the motor car cubic capacity is 1.6 litres and above, the employees can claim
and submit bills for Rs.2,400/-p.m. or Rs.28,800/-p.a.
Note: Employees are also eligible to claim for driver’s salary @ Rs.900/-p.m.
• Employees must disclose the cubic capacity of the vehicle at the beginning of the
year.
• In the case of other conveyance like Scooter, Motorcycle etc. the employees can claim
up to Rs.900/- p.m. or Rs.10,800/- p.a.
• Fuel bills, motor car r e p a i r & maintenance bills, insurance bills can be submitted
for claiming the benefit which should pertain to the financial year (April - March).
• The vehicle shall be in the name of _ the e m p l o y e e a n d c o p y of registration
certificate must be submitted.
2. Professional Pursuit Allowance- Rule 2BB
As per Rule 2BB for the section 10(14)(1), any allowance granted for encouraging the
academic, research and training pursuits in educational and research institutions is
allowed.
• The eligibility limit for Professional Pursuit Allowance is Rs.75,000/-p.a.
• This allowance is granted for encouraging the employees in their academic research
and training pursuits in educational & research institutions.
• Employees s h a l l submit t h e t u i t i o n /course f e e s receipts from
e d u c a t i o n a n d r e s e a r c h institutions in support to claim this allowance.
• The bills for the books and periodicals required for pursuing the education &
Research shall also be submitted.
3. Leave Travel Allowance (LTA)- Section 10(5)
• The eligibility limit for LTA is Rs.75,000/-p.a.
• The travel undertaken should be within India and hence overseas travel is not allowed.
• Employees and his family shall avail the benefit for any 2 journeys within a block of 4
years. The current block is between Jan 2022 to Dec 2025.
Note: *Family means spouse, 2 children of employees, and parents, brothers and sisters
of the employee if they are wholly or mainly dependent on him.
• If an employee travel to multiple destinations in a single travel, exemption can be
availed only for the travel cost eligible from place of origin to the farthest place of the
destination by shortest possible route.
• For availing the LTA, the employee, should avail minimum 3 days of consecutive
earned leave/casual leave for the date of travel and the proof of approved leave need
to be submitted along with the travel tickets which are being produced.
• If the actual cost of travel is less than the eligible amount, then the amount which is less
will be exempt.
• Exemptions with respect to various modes of transport are mentioned below.
Sl. Scenario Eligible Exemption Documents to be
No. submitted
1 In case of Journey by Air Economy Air tickets showing
Fare travel dates and
amount.
2 In case of Journey by Rail Air-conditioned First-class Rail tickets showing
Fare travel dates and
amount.
3 Journey other than Air & Rail First Class or Deluxe class Proof showing travel
In case of absence of Rail fare whichever is less by a dates, no. of
facility but where recognized recognized public transport passengers, place of
public transport system exists system. origin & farthest place
and amount.
4 Journey other than Air & Rail Air-conditioned first- Proof showing travel
In case of absence of Rail class rail fare for dates, no. of
facility and no recognized public similar distance. passengers, place of
transport system exists origin & farthest place
and amount.
5 Any other case Air-conditioned first-class Proof showing travel
rail fare dates, no. of
passengers, place of
origin & farthest place
and amount.
4. Communication Allowance
• The eligibility limit for Communication allowance is Rs.36,000/- p.a.
• Employees are eligible to submit bills for one landline, one mobile phone and one
internet connection charges.
• The connections should be in the name of the Employees.
• Expenses incurred t owards both pre-paid and post-paid connections are allowed
provided bills are submitted.
• Employees otherwise eligible for official communication expenses reimbursements
cannot produce the same bill for FBP.
5. Food coupons
Food Coupons are available for Rs.1,100 or Rs.2,200 p.m. The declared amount will be
recovered from your salary and will be paid to you through the company provided food cards.
No supporting’s are required for this component.
Notes:
• The Company shall reserve the right to modify, amend or with draw these guidelines
in whole or in part thereof, in consultation with the Managing Director at their sole
discretion.
• Finance Department shall have the discretion to disallow any claim which is not
justifiable or unreasonable under the flexi benefit plan.
