Budget 2022: Is the FM packing something for WFH employees?
In the past two years, many IT and other companies asked their employees to work from home. Many companies vacated their office premises and shifted the furniture and electronic equipment like laptops to the workers’ residences.
In the coming budget, can the employees, who have spent out of their pockets while working from home or the company owners who sent laptops, furniture, and provided free Wi-Fi to workers who were working from home get any benefit?
Soon after the lockdown was announced at the end of March 2020, except manufacturing companies, factories, and MSMEs, all other workers were asked to work from home to prevent the spread of COVID-19.
Due to this, many IT companies in Chennai’s IT corridors of OMR and ECR vacated their offices and similarly, employees from districts like Erode, Tirupur, Madurai and Tirunelveli vacated their houses and went to their native place and started work from their own residences.
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“Every Union budget, there are expectations from all sections as to whether they will get any relief. Similarly in the coming budget, many company owners as well as their employees are expecting relief, but I feel there will be no extra relief beyond what is available in the Income Tax Act or the Company Act,” said chartered accountant G. Sekar.
Sekar said that IT company owners or other company owners who vacated their offices and asked their workers to work from home did not lose in terms of revenue.
“In fact, the owners received more revenue as they did not pay the rent. For example, if an IT company was paying ₹10 lakh per year as rent, the same was a saving for the owner after he vacated the office. Even if he had to pay 30 per cent as income tax and after including surcharge and other charges, the owner paid ₹4.5 lakh, the remaining ₹5.5 lakh is his savings So, why will he complain or expect more relief?” asked Sekar.
Similarly, by providing furniture, desktop or laptop to employees who were working from home, the owner can still take depreciation and other expenses, as in the previous year, in the company accounts.
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“All furniture, laptops, and other things sent to workers’ residences are owned by the company and therefore, the depreciation on these will be reflected in the company’s accounts only. The ownership does not change because the furniture or computer is shifted to employees’ residences,” said Sekar.
“Sections 31 and 32 of the Income Tax Act have all details on how the companies can show their furniture and electronic equipment and therefore, we cannot expect any more relief for the company owners or its employees due to working from home,” said Sekar.
