Half the world has resorted to working from the safety of their homes, and the government is expected to announce tax reliefs for such employees.
Tax experts have confirmed this, stating that such employees might be allowed some deductions in the expenses that they incur while working from home.
Read on to find out more about deductions that will be offered to employees working from home!
Government To Give Deductions To Employees Working From Home
A consulting firm PwC India has stated that the government might be looking at deductions for expenses that are incurred by salaried employees while they work from their homes. These deductions will reportedly be introduced in the upcoming budget.
It will be the country’s first paperless Union Budget, conducted on February 1, 2021, by Finance Minister Nirmala Sitharaman.
Apparently, the reason behind this is to increase demand. As per PwC India senior tax partner Rahul Garg, the creation of the demand is particularly focussed on money that is given to or left in the hands of the individuals.
As per Garg, “whatever expenditure they are incurring working from home, which expenditure in the typical case would have been incurred in office by their employers if they were using offices to work if you allow that to be treated as giving them an entitlement for deduction and that saves tax for them.”
Will This Help In Boosting Demand Creation?
He believes that this will result in people having more money in their hands. As of now, the deductible expenditure is in the hands of the individual and there is no tax base reduction or sacrifice of any revenue.
He also said that such a measure would be reasonably equitable as businesses which incur that expense, there would be a deductible expenditure in their books.
As much as a few thousand rupees would be awarded as a concession or deduction in relation to COVID related expenses per month. This would mean that every person who is employed can get deduction and tax relief in their hand and also be a part of boosting demand.
Recently, there was news that Finance Minister Nirmala Sitharaman is expected to increase the current Income Tax exemption limit under Section 80C of the Income Tax Act from Rs 1.5 lakh to about Rs 3 lakh. along with this, There also is the possibility that basic tax exemption might be raised up to Rs. 5 lakhs under the budget for the new year, 2021.
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