Thursday, August 18, 2022
  • About
  • Advertise
  • Careers
Scoftware Magazine
  • Home
  • Politics
  • Business
  • Culture
  • Opinion
  • Lifestyle
  • Entertainment
  • Login
No Result
View All Result
Scoftware Magazine
Home Business

Union Budget 2021: Govt should consider tax relief to individual taxpayers, employers in WFH scenario

Jaleel M. by Jaleel M.
January 28, 2021
in Business
0
Union Budget 2021: Govt should consider tax relief to individual taxpayers, employers in WFH scenario
0
SHARES
16
VIEWS
Share on FacebookShare on Twitter


The outbreak of COVID-19 pandemic in March 2020 in many ways compelled organisations to implement work from home policy for their employees during the lockdown period and post thereto

Related posts

10 grams of 24-carat stands at Rs 50,790; silver at Rs 61,200 per kilogram  

10 grams of 24-carat stands at Rs 50,790; silver at Rs 61,200 per kilogram  

May 18, 2022
How will you get tax benefits under new I-T rules for charitable organisations? Read on to find out

How will you get tax benefits under new I-T rules for charitable organisations? Read on to find out

May 17, 2022

Union Budget 2021: Govt should consider tax relief to individual taxpayers, employers in WFH scenario

Government should look for ways to give tax relief in work from home scenario. Reuters

With the Union Budget 2021-22 on the anvil, akin to past years, a common man hinges his hopes of having more money at his disposal to spend/save as he desires. Especially, considering the present hardships and challenges caused by COVID-19 pandemic on taxpayers’ livelihood and overall economy, the government may evaluate how they can enhance the common man’s purchasing power.

The wish list on the personal tax front are as under:

Separate deduction for COVID-19 treatment

Currently, few deductions have been prescribed under Chapter VI-A of the  Income-tax Act, 1961 (the Act) for medical treatment for self or dependent suffering from disability/severe disability (Section 80DD, 80U of the Act), medical treatment of prescribed diseases and ailments (Section 80DDB of the Act). However, for those not covered under any health insurance, no particular deduction has been prescribed under the Act covering the treatment cost for COVID-19 .

Donation made to PM CARES fund designed specifically for providing COVID-19 relief is eligible for 100 percent deduction u/s 80G of the Act, but no corresponding deduction has been notified for expenses incurred on treatment of the disease itself.

In order to provide much-needed relief to the taxpayers, especially the ones not covered under a health insurance policy, a separate deduction capped up to Rs 1,00,000 or actual treatment cost incurred by the taxpayer for self or family, whichever is lower may be introduced under the Act given the substantial cost involved in COVID-19 treatment in government or private hospitals.

Provision for furniture by employer

The outbreak of COVID-19 pandemic in March 2020 in many ways compelled organisations to implement work from home (WFH) policy for their employees during the lockdown period and post thereto. During such WFH situation, several companies endeavoured to put in place necessary enabling infrastructure through provision of furniture (like tables, ergonomic chairs, etc.), high-speed internet, printers, desktops, stationery, etc. for ease of working at their employees’ residences to ensure conducive work environment.

Some companies decided to grant a fixed allowance to employees to meet the expenditure on such furniture/other items, while others decided to provide reimbursement. While both the allowances and reimbursements are necessitated by the business requirement, these benefits have the potential of being taxed in the hands of the employees as a prerequisite.

As this situation has not been expressly dealt with in the Act or the Rules made thereunder coupled with a fact that WFH on a large scale appears to be a long-term norm now, some tax relief specific to work from home scenario may be provided to individual taxpayers and their employers.

Realignment of income slabs/tax rates

The exemption limit for individual taxpayers below 60 years of age amounting to Rs 2.5 lakh per annum has remained constant from Financial Year (FY) 2014-15. Some relief was provided to taxpayers by Union Budget 2020-21 wherein alternative optional new tax regime was introduced which allowed the taxpayers to choose between the existing tax regime and new tax regime whichever is more beneficial given their tax situation. By opting for such new tax regime, a host of exemptions/deductions were to be foregone by the taxpayer.

While the new tax regime had lower tax rates, the ultimate benefit to the taxpayer was the basis of the deductions/ exemptions otherwise he/she was eligible to. Hence, with the objective of simplifying this further and enhancing the net disposable income, it may be considered whether the basic exemption limit under the existing tax regime can be enhanced to Rs 5 lakh itself. This would also need to be assessed basis the potential number of taxpayers who may fall out of mandatory tax return filing requirement. Subsequently, the other slab rates both under the existing and new regime can be adjusted basis the revised limits in line with the progressive tax rate system India has always adopted.

Housing tax breaks

To reignite the momentum in the real estate sector, the government may assess enhancing the standard deduction of 30 percent of Net Annual Value to 50 percent and/or enhancing the current limit of deduction for interest payable on housing loan on self-occupied properties to Rs 4 lakh per annum.

Increase in deduction u/s 80C

The limit of Rs 1.5 lakh in respect of deduction under Section 80C of the Act for various common tax-saving investments/expenditure (such as employee provident fund, public provident fund, principal repayment of housing loan, children tuition fee, national savings certificate, etc.) has remained constant for almost half a decade now. Given the current economic scenario, the government would like to provide impetus to demand and consumption. With this in mind, if individuals are encouraged to spend on expenses like school fees, housing etc. the government may hence consider increasing this to Rs 3 lakh per annum. Alternatively, a separate deduction may be introduced (in addition to the proposed enhanced limit) for certain high-value transactions such as children’s tuition fee (keeping in mind the spiralling education cost over last few years), expenditure on specific items made in India, etc.

Though expectations of a common man on personal taxes can be widespread, maintaining fiscal discipline while providing impetus to higher economic growth will be an unenviable task for the finance minister to perform especially in these unprecedented times. Thus, it would be interesting to see what personal tax reforms are introduced in the Budget 2021 on this front.

The writer is Partner and Head, Global Mobility Services-Tax, KPMG in India

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.



Source link

Previous Post

Union Budget 2021: Nirmala Sitharaman to present budget in Parliament on 1 February; when and where to watch

Next Post

Union Budget 2021: Bold policy interventions needed to fast-track digitisation in post-COVID world

Next Post
Union Budget 2021: Bold policy interventions needed to fast-track digitisation in post-COVID world

Union Budget 2021: Bold policy interventions needed to fast-track digitisation in post-COVID world

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

Love Is Blind’s Jessica Batten Reacts to Ex Mark Cuevas Cheating Allegations

Love Is Blind’s Jessica Batten Reacts to Ex Mark Cuevas Cheating Allegations

2 years ago
Mukesh Ambani welcomes Saudi Aramco as strategic partner in O2C business

Mukesh Ambani welcomes Saudi Aramco as strategic partner in O2C business

1 year ago
Edens Back Releases New Music Video For “It Don’t Mean Jack”

Edens Back Releases New Music Video For “It Don’t Mean Jack”

2 years ago
Reddit Co-Founder Alexis Ohanian Resigns to Help Curb Racial Hate

Reddit Co-Founder Alexis Ohanian Resigns to Help Curb Racial Hate

2 years ago

FOLLOW US

  • 116 Followers
  • 29.5k Followers
  • 174k Subscribers

BROWSE BY CATEGORIES

  • Business
  • Culture
  • Entertainment
  • Lifestyle
  • Music
  • National
  • News
  • Opinion
  • Politics
  • Sports
  • Tech
  • Travel
  • World News

BROWSE BY TOPICS

2018 League Balinese Culture Bali United Budget Travel Champions League Chopper Bike Doctor Terawan Istana Negara Market Stories National Exam Visit Bali

POPULAR NEWS

  • Charles B and Kamil Ghaouti Collaborate on Groovy New Track “You’re Not Mine,” featuring LauraBrown. Out on Protocol Recordings

    Charles B and Kamil Ghaouti Collaborate on Groovy New Track “You’re Not Mine,” featuring LauraBrown. Out on Protocol Recordings

    0 shares
    Share 0 Tweet 0
  • Salted vs. Unsalted Pistachios

    0 shares
    Share 0 Tweet 0
  • Kris Jenner Spills Details About Her Sex Life With Corey Gamble: Watch

    0 shares
    Share 0 Tweet 0
  • Sam Heughan & Graham McTavish Are Men in Kilts for Travel Show

    0 shares
    Share 0 Tweet 0
  • Doja Cat Responds to Accusations of Racism

    0 shares
    Share 0 Tweet 0
  • About
  • Advertise
  • Careers

© 2020 Scoftware.com

No Result
View All Result
  • Home
  • Politics
  • Business
  • Culture
  • National
  • Sports
  • Lifestyle
  • Travel
  • Opinion

© 2020 Scoftware.com

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Terms and Conditions - Privacy Policy