Will FM listen to your “Mann ki baat” and announce tax benefits for working from home?

When the pandemic hit, most organizations struggled to adapt to the “new normal,” while some resorted to strategic changes in an incremental manner. One of the most common and immediate changes adopted by most employers was the work from home (WFH) culture allowing employees to continue to meet the needs of their business.

Live updates: Budget 2022 Live Updates: Will FM Listen to Your Mann Ki Baat and Rejig Income Tax Slab?

The shift to a work-from-home model has had a significant and lasting effect on employees’ pockets. Whereas before they had never had to worry about out-of-pocket mobile phone costs, furniture, electricity and internet-related expenses thanks to these costs being covered by their employers, working at home now means that employees have to bear all those costs. “The 2021 budget could introduce tax-free homework allowances for employees. Allowing deductions for these expenses will increase take home pay, ultimately creating demand for goods and services in the country,” Archit Gupta, Founder and CEO of ClearTax.

Faced with rising inflation and falling average per capita income, the working class will look to Finance Minister Nirmala Sitharaman for some relief in the 2022 budget.

Home work allowance

In view of the new expenses that employees are facing, the Institute of Chartered Accountants of India (ICAI) has requested the central government to include some tax breaks related to work-from-home expenses. In his pre-budget memorandum, he wrote: “It is suggested that expenses incurred for furniture/other installation costs may be specifically exempt.” “Since employees may not have the appropriate facility at home to perform their official duties, the Employer shall provide the necessary facility for employees to perform their jobs effectively and efficiently,” he added.

According to the ICAI, the tax exemptions should extend to the “provision of a desk, chairs and another set up in the homes of employees in light of working from home and could be taxed as an indirect benefit in the hands employees”.

Improvement of allowances/reimbursements:

Household spending has been affected since the start of the pandemic due to increased medical costs and WFH expenses such as the cost of furniture, electricity, internet, etc. 75,000 rupees.

Deduction for contribution to the provident fund account (PF)

In recent budgets, excess contributions and accrued interest on PF accounts have been rolled into the tax net. However, the employee’s contribution to the PF is allowable under the combined deduction limit of Rs 150,000 (under Section 80C of the Income Tax Act 1961) and therefore must be provided separately.

Furthermore, increased household savings not only benefit individuals, but also provide a source of cheap, long-term funds for the government. Sujith Narayanan, co-founder of Fi-Neo-bank, said: “The budget should increase the annual limit of Rs 1.5 lakh on tax saving schemes under Section 80C to encourage the savings and investments. Additionally, the five-year lock-up period on tax-saving term deposits under this section should be reduced to three years to make it a more attractive investment option.

Read all the latest news, breaking news and updates on coronavirus here.

Image Source

News Source

Leave a Reply

Your email address will not be published.