If a chair and desk are primary requirements to work and one is forced to work from home – is it really a “perquisite” if your employer rents them for you.
This is one of the questions uppermost on most employers’ minds these days, amidst grappling with all of the other consequences of the pandemic. Let’s face it – most employees didn’t have the need to have a desk / workspace at home before # Covid 19 struck. A few months into the lockdown, those employees who can, are still sensibly staying away from office increasing the need to change from temporary to more permanent workspace arrangements.
The India Tax Rules touching upon the taxability of benefits provided by the employer were drafted when work from home was a privilege granted to an employee and not the necessity it is these days.
These Rules stipulate that employers have to withhold taxes on the ‘perk value’ of assets provided to employees for their use. The perk value is either 10% of the cost of the asset per annum or the rental costs borne by the employer. Strangely, the Rules do not specify the place at which the asset is provided for the employees use, but the implied understanding is that the asset is used by the employee for ‘personal’ purposes and that brings us back to the question – when the furniture is meant for ‘official use’ and rented specifically during the pandemic to help employers continue running their businesses during Covid19 by having their employees work from home, is there really a personal benefit that arises that should be taxed by the Government.
