Budget Expectations in 2022 for Salaried employees
Since the year 2020, the Covid-19 outbreak has wreaked havoc
on salaried workers. Employers around the country have been compelled to ask
their staff to work from home as a result of the spreading virus.
Employees had to spend more not just to protect themselves
and their families from Covid-19, but also to cover a variety of other costs
such as internet and phone bills, furniture to set up a home office, and
increased electricity bills, among other things. Employees didn't have to worry
about these costs before to the pandemic because the workplace provided all of
their work-related necessities.
In view of the foregoing, salaried employees anticipate the
government announcing a Work from Home Allowance in the 2022 Budget, which
would provide tax relief on expenses incurred while working from home during
The government might learn from nations such as the United
Kingdom, where paid employees who work from home receive a set rate of GBP 6
per week in tax relief for additional household expenditures.
Businesses have implemented work-from-home strategies as a
result of the lockdown, according to the ICAI. “there are high possibilities
that employees may not have the appropriate equipment at home to carry out
official tasks, the employer provides the necessary equipment so that employees
can complete their work swiftly and effectively."
Tax exemption should be offered, according to the ICAI,
because providing of desk, chairs, and other set up at employees' homes in
light of work from home could be taxable to the employees.
Standard Deduction of
Rs 1 lakh
According to certain suggestions, the government should also
increase the Standard Deduction limit under Section 16 of the Income Tax Act
from Rs 50,000 to Rs 1 lakh.
Aside from employment taxes, the Standard Deduction can be
used to deduct a range of expenses incurred during the course of employment.
Employees must incur a range of expenses that they are unable to deduct during
the course of their employment. According to the ICAI, a handful of the
exclusions available to them under section 10 are subject to higher limitations
that were set several years ago and are no longer applicable due to inflation.
Employees must pay several expenses over the course of their
employment, including for skill upgrading and providing services as employees,
according to the study, and the deduction for such charges must be expanded
every year. To prevent revenue leakage, such a deduction might be tied to the
cost inflation index, much as it is for income classed as capital gains, and
the maximum amount may be set at Rs. 1,00,000.
"It is suggested that the standard deduction u/s 16 be
increased to at least Rs. 1,00,000, taking inflation and salaried individuals'
purchasing power into consideration, and that it be linked to the cost
inflation index for regular enhancement in deduction amount, comparable to that
available for income under the head
capital gains." according to the ICAI.