Tax Relief for Work from Home: Need of the hour during Corona times

Let's tell you an interesting fact: the government is planning to give tax breaks to Work from Home employees. This acronym was born in the Covid pandemic. It has been one year of lockdown. Industries and offices are closed. However, most employees in India are not allowed and unwilling to return to the office. So the future of work is going to be hybrid.

Thus, the government thinks a lot about how to give tax breaks to employees who are doing work from home for the welfare of society.

In many cases, it has been found that some employers have provided allowances, reimbursements, and moreover assets to their employees to meet the requirements.

Therefore, in cases where employers have provided such allowances to cover these additional expenses, the above allowances are taxable in the hands of the employees. The reason is that there are no specific exemptions in the tax laws.

The government may consider providing deductions for expenses incurred by salaried employees who are doing work from home in the forthcoming Budget as it would boost demand.

The expenditure which they are incurring and bearing while working from home will be incurred in the office and will be borne by the employer if the employees have worked in the office. If you allow those expenses for deduction in tax, it shall leave more money in their hands. This is fair enough and can be done by the government.

Such a measure, if adopted and implemented by the government, would be “reasonably equitable” because if the companies had to incur those expenses, it would be a deductible expenditure in their books.

It simulates the environment of transferring money in the hands of these people (who are working at home) by providing a discount/allowance for COVID-related expenses and a few thousand dollars in your hand per month can contribute to creating demand in the mechanics of the economy.

In the past two years, the government has introduced an amnesty scheme for excise and services taxes, followed by “Vivad de Vishwas” scheme for settling direct tax disputes.

Customs, for the imposition of the duty, has not been taken into consideration before and this might be a good time to have a similar scheme thus allowing the industry to pay the disputed tax and if you release the fine you may be able to collect the funds in the domain of Rs15,000-20,000 crore.

If the authorities want to raise additional money and, in return, bear the expenses for vaccines, the impact will not be limited to a few products and will be widespread. In addition, it will be applied taking into account the base value and not the tax component.

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