“Post the covid-19 pandemic related lockdowns and restrictions, many companies have now adopted a hybrid working arrangement wherein employees are allowed to work from home. This has led to the need of setting up home offices, where basic infrastructure such as chair, tables, printers etc. are required to effectively carry out the work. As per the current section 17(2) of the Act, any benefit provided by the employer to set up home offices would get taxed in the hands of the employee,” says Grant Thornton Bharat in its pre-Budget 2023 memorandum.
“Work from home and related support in setting up home offices is the now the new normal and pre-requisite to smoothly run businesses, it can no longer be considered as a benefit provided by the employer to the employees. It is recommended that support provided by the employer to set up home office, in any manner (reimbursements or otherwise) should not be taxed as perquisite in the hands of the employees,” it says.
