2021-03-28 14:22:08
Got a lot of questions about SBI's SCP (Smart Compensation Package). Lots of new SBI POs asking if they should take it. In general, remember that for any amount you get under SCP you have to pay the taxes on it while if you don't opt in then your perks are tax free.
However, if you don't take SCP you have to apply for every reimbursement on your own which, as you will know soon, can be quite taxing (pun intended).
Thumb Rule = If you plan on staying in SBI forever, don't take it. If you want to exit in next 4-5 years then take it.Some more points:
• If you are maxing out your 80C and 80CCD(2) investments then it makes sense to take SCP [Remember to declare it at the beginning of every Financial Year in your HRMS IDF]
• If you aren't married & won't marry soon then additional LFC/LTC won't be useful to you & it makes sense to take SCP. If you have wife & children then you lose here by taking SCP.
• If you don't want to buy all furniture in one shot then take SCP. You will get the whole Furniture Allowance but it will be staggered over time.
• If you don't have a car and don't plan to buy one soon you should take SCP. (Does not apply for bikes as allowance is lesser)
• In general once you reach a higher level of Scale 2 your salary will become much larger so with SCP+Salary your taxes will increase. Before that time for 99% of people you will profit if you take SCP (but remember 1st point and always max out your 80C Investments)
My Opinion = I like to actively manage my money and so I took it right when it started in SBI. Since I don't lead a lavish life the extra money I could invest instead of burning it but if you love to spend a lot of money maybe SCP is not for you (getting that extra money every month can tempt one to spend a lot).
For a detailed breakdown of what all the SCP contains check the video below (have linked it to the correct timestamp where I talk about SCP)
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