Let’s tell you an interesting fact: the government plans to give tax breaks to workers who work from home. This acronym was born in the Covid pandemic. It was a year of lockdown. Industries and offices were closed. However, a majority of employees in India are not admitted or willing to return to the office. So the future of work will be hybrid.
As a result, the government is putting a lot of thought into how to give tax exemptions to employees who work from home for the good of society.
In many cases, it has also been found that some employers have given their workers allowances, reimbursements and, on top of that, assets to meet needs.
In cases where employers have granted such allowances to cover these additional expenses, these allowances are taxable on employees. The reason for this is the lack of specific exemptions in the tax laws.
The government could consider adding deductions in the upcoming budget for expenses incurred by home-working employees as this would fuel demand.
The expenses that they incur and would have to bear while working from home would have been incurred in the office and would be borne by the employer if the employees had worked in the office. If you take these expenses tax deductible, more money stays in your hands. This is fair enough and can be done by the government.
Such a measure, if taken and implemented by the government, would be “reasonably fair” because if companies had to bear these costs it would have been a deductible expense on their books.
It simulates an environment of money transfer in the hands of these people (who work at home) by providing a deduction / concession for the COVID-related expenses and a few thousand dollars per month in their hand can help create demand in the Mechanics of the economy.
In the past two years the government has introduced an amnesty scheme for excise and service taxes, followed by the Vivad de Vishwas scheme to settle disputes over direct taxes.
Customs has not been considered earlier for collecting the duty and this could be an appropriate time to obtain similar settlement and consequently allow the industry to pay the controversial taxes on the domain of Rs15,000-20,000 crore.
If the authorities want to collect an additional amount of money and in return bear the costs of vaccines, then the effect would not be limited to a few products and broadly based. In addition, it would be applied taking into account the underlying asset and not the tax component.
(By Amit Gupta, MD, SAG Infotech)
Get live stock quotes from BSE, NSE, US market and the latest NAV, mutual fund portfolio, read the latest IPO news, best performing IPOs, calculate your taxes with the income tax calculator, know the top winners , Top losers and best equity funds in the market. Like us on Facebook and follow us on Twitter.
Financial Express is now with Telegram. Click here to join our channel and stay up to date with the latest biz news and updates.