Alert for WFH Employees As Govt May Provide Tax Deduction

The government can seek to cut the deductions for the expenses of the salaried person while working from home for the budgeting which is yet to arrive as it seems to raise the demand for consulting firm PWC India.

The demand raised is focussed on the money which is furnished or provided in the individual’s hands, said Pwc India senior tax partner Rahul Garg.

“One clear thinking is at the level of small to medium taxpayer can we look at, in view of the COVID, a deduction to them particularly for salaried employees when they work from home”

“So 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. It will leave more money in their hands,” commented by Rahul.

Due to the lockdown phase, various firms have adopted work from home to prevent any risk for their employees.

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This implementation is “reasonably equitable” as if the businesses need to subject that expense which will have a deductible expense in their records.

“It creates a situation of shifting the money in the hands of individual by giving a concession or deduction in respect to COVID related expenses and they could look at few thousand rupees per month and every person who is employed can get deduction and tax relief in their hand and contribute to demand creation,”

“There are two things which we are talking about – one is increasing customs duties on a lot of finished products particularly for items where the government has come out with a Production Linked Incentive (PLI) scheme. It could be consumer electronics, auto components”

“There are discussions which I have heard there are plans to increase duties on cellphone, furniture and so on,”

“Customs was not touched earlier and maybe a right time to get a similar scheme under customs and allow the industry to pay disputed tax Know about the tax dispute settlement scheme (Vivad se Vishwas Bill) under the IT act. Under this scheme, taxpayers can settle all disputes before the end of 31st January, 2021. Read More and if you waive off penalty you may be able to garner Rs 15,000-20,000 crore,”

My sense is that if they want to collect an additional amount of money and if they fund expenses for vaccines then it would be broad-based and not limited to few products and would be applied on base value and not on tax component