Department of Labor and industry discuss changes to pay structure for working from home

Consultancy firm Deloitte India’s 2022 pre-budget expectations report suggested more deductions on “work from home” expenses for employees. “Given the current situation, employees are working from home in all businesses,” the accounting firm said, recommending an additional allowance of Rs 50,000 WFH for employees.

“Employees are likely to incur ‘extra work from home’ expenses, such as internet charges, rent, electricity, furniture, etc., and therefore employers should provide allowances to meet these expenses,” he said.

Deloitte India cited the example of the UK where the government provided a flat rate of £6 (about Rs 609) per week of tax relief for additional household costs for those working from home.

The Institute of Chartered Accountants of India also recommended that the government provide tax relief on home business expenses in its pre-budget memorandum. “Expenses incurred for furniture/other installation costs may be specifically excused,” the ICAI suggested.

A report by industry body Nasscom recommended six steps the government can take to support the work-from-home model, including changes to labor laws to redefine working hours and shift schedules, and changes in income tax laws since expenses incurred by employees to enable work from home must be treated as a business expense.

This report was sent to the Ministry of Labor and the Ministry of Telecommunications after a meeting of government officials with industry representatives in May last year.