Context: The forthcoming budget will need to consider changes induced after an unprecedented 2020.
Suggestions for the Tax reforms in the upcoming Budget: factoring in the Work from Home (WFH)
While computers and laptops provided by the employed are not taxed, other assets like swivel chairs attract 10% tax.
The Finance Bill 2021 should amend Rule 3 (7)(vii) and provide that provisions of desks, chairs, internet installations and other assets that facilitate WFH will not be treated as a taxable perquisite.
Owing to WFH, employees are bearing higher electricity charges; thus, a portion of the residential electricity bill should be reimbursed by the employer and treated as tax-free.
These favourable amendments to the Income-Tax (I-T) Rules will not cost the exchequer much,
Services rendered by employees of SEZ units from their homes will be eligible for the tax holiday benefit.
Boosting the real estates: Some state governments such as Maharashtra and Karnataka have cut stamp duties.
It is now possible to buy a residential house from a builder at 20% lower than the value arrived at as per the circle rate.
Providing concession on secondary sales: Due to loss of jobs and many preferring to work from home leads to unwanted selling of secondary houses.
Section 71 of the I-T Act provides for set-off of any loss arising under the head' income from house property'.
In any financial year, the loss under the head house property must be allowed to be set off in entirety, against any other head of income.