Byju's, the famous Indian edtech giant, is in hot water again! This time, it's over not paying their employees' Tax Deducted at Source (TDS) and provident fund (PF) contributions. As if they didn't have enough problems with accounting issues, course complaints, and layoffs, now they're facing legal trouble too. Let’s dive into this drama!
Understanding TDS
Tax Deducted at Source (TDS) is basically the tax your boss takes from your salary and gives to the government. It’s like forced savings, but with taxes!
The Allegations
Word on the street is that Byju's hasn't been depositing TDS since July 2023. Employees found out when they couldn't see their TDS details on Form 26AS while filing taxes. Talk about a nasty surprise!
Provident Fund (PF) payment failures
What is PF?
A Provident Fund (PF) is like a piggy bank for your retirement. Both you and your employer put money into it, and it’s managed by the Employees' Provident Fund Organisation (EPFO).
Byju's PF defaults
Since December 2023, Byju's allegedly hasn’t been putting money into the PF. In November 2023, only about 16,220 employees had made contributions, compared to 47,632 in January 2022.
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Employee Reactions
Hitesh Jain, a chartered accountant helping some employees, said,
“It is Byju's responsibility to collect the TDS and deposit it in the government treasury. What it has done is deduct the TDS from the employees, but it has defaulted on depositing the same with the government. In a few cases, it is for a year, and in a few cases, it is for a few months.”
Employees are now worried about getting fined for unpaid taxes.
Impact on Employees
Former employees are really feeling the pinch. One from Bengaluru said, 'I left months ago and still haven’t gotten my full settlement or PF. What gives?' This means they haven’t received all the money owed to them, including their PF savings.
Legal Implications
Consequences of TDS Non-Compliance
Experts in taxes are raising the alarm. Company directors may face fines, interest charges, and even jail time if they fail to pay TDS. It's important stuff! Therefore, failure to pay TDS can result in serious consequences for the company, such as fines and jail time.
Provident Fund Violations
Skipping PF payments isn’t a joke, either. The EPFO and affected employees could take legal action, adding to Byju's headaches.
Employee Impact and Reactions
Current Employees' Struggles
Current employees are having a hard time getting answers from Byju's HR. Despite asking many times, they get vague replies or none at all. It’s like talking to a wall!
Former Employees' Plight
Former employees are thinking about legal action, possibly going to the National Company Law Tribunal (NCLT). They’re not happy campers, that’s for sure.
For more on the woes on ex-employees, read: Ex-Byju's Employees Encounter Hiring Hurdles Amid Company's Image Crisis
Financial Instability
Byju's is having money troubles beyond TDS and PF issues. With less venture capital and lower demand post-COVID-19, they’ve had to lay off staff and cut their valuation.
Legal Showdowns
On July 16, 2024, the Bengaluru bench of NCLT started an insolvency resolution process for Byju's parent company, Think and Learn, for not paying Rs 158.90 crore to the Board of Control for Cricket in India (BCCI). Major investors are also unhappy and want to replace the top management.(updated news below)
For more on Byju's, read: Byju’s Crisis Deepens: Mohandas Pai, Rajnish Kumar To Exit Advisory Board
Company Response and Future Outlook
Byju's hasn’t officially commented on the TDS and PF allegations. Sources say they’re starting to pay some PF amounts in bits, but the full fix is still up in the air.
representative photo of a disgruntled employee
Future Prospects
Byju's has a tough road ahead. They need to fix these legal and financial issues to regain employee trust and stabilise operations. How they handle this mess will shape their future in the edtech world.
Conclusion
Byju's current mess with TDS and PF is just another chapter in their ongoing saga of trouble. Not paying employees' taxes and retirement savings not only puts the employees at risk but also brings big legal risks for the company. Byju's needs to get its act together, pay what's due, and rebuild trust to ensure a stable future in the edtech industry. How they handle this situation will be crucial for their long-term success and reputation.
Update to the "Legal Showdowns" section:
16th July'24 Evening: In a significant development since this article was written, the NCLT has officially initiated insolvency proceedings against Byju's. The tribunal appointed Pankaj Srivastava as the interim resolution professional, who will now oversee the company's management. The NCLT stated that Think & Learn Private Limited had indeed defaulted on approximately ₹1.59 billion owed to BCCI. Byju's spokesperson maintains that they are seeking an amicable settlement with BCCI and are reviewing the order. This move further complicates Byju's already challenging financial and legal situation.
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