Union Budget 2021: Work From Home might leave you Richer

Andrea D’souza | January 22, 2021

No amount of policies can ever arm a country against such a brutal pandemic. The year 2020 was a year of compromise, patience, resilience, and just having the will to fight back.

Not just social activities but even economic activities found themselves in a standstill. This standstill cost many households an arm and a leg. Work from home became the new normal and virtuality became the reality. With the 2021 Union Budget in sight, Work From Home sees a positive ray of sunshine.  

How can the Union Budget 2021 heal the economy?

Fractured by Covid, uplifting the economy is of paramount importance. Amidst this, the need for fiscal support is vital, keeping in mind the relaxation of fiscal consolidation for a year. This fiscal year, the Government of India should focus on the fiscal deficit range instead of merely focusing on the ‘fiscal deficit target’. The quality of the deficit can be improved by including off-budget liabilities and of course by stopping the rot by ensuring transparency.  

What does the budget look like for individuals opting for Work From Home?

Since Work from home became the new normal, through this budget the Government may soon chalk out a plan to provide tax deductions for expenses that were incurred by employees working from home. The following statement was released by PwC India on Thursday, January 21, 2021.  

While addressing the pre-budget session, Rahul Garg, PwC (PriceWaterhouseCoopers) India’s senior tax partner said, “One clear thinking is at the level of small to medium taxpayers can we look at, in view of the COVID, a deduction to them particularly for salaried employees when they work from home. So whatever expenditure they are incurring working from home, which expenditure in the typical case would have been incurred in office by their employers if they were using offices to work if you allow that to be treated as giving them an entitlement for deduction and that saves tax for them. It will leave more money in their hands.”

Through this approach, the government aims at increasing liquidity, investments as the demand creation is solely being left in the hands of the individual.   

Stock Markets Soaring New Heights

Viewing this, it could also be the perfect time to invest in the stock market. With the stock blowing at 50,000 from the initial value of 100 in the late 1970s, the market has nearly witnessed 500 times the value in nearly 42 years. On the other hand, Nifty too is flourishing. The Indian stock market is quite close to hitting the 15,000 marks from its initial value of 1000 in 1995. The CAGR (Cumulative annual growth rate) which depicts the mean annual growth rate has predicted an approximate growth of 18% for Sensex and 13.5% for Nifty.

Another perk to give a thought to investing in the stock market is because Covid has definitely left a scar on your post-retirement plans. According to CMIE, (Centre for Monitoring Indian Economy) over 12.2 Crore, Indians lost their jobs due to the pandemic. India’s senior generation has economically fallen prey to the lockdown as well. With rentals going vacant, maintenance and bills piling up, things were tough for them as well. This has triggered many to burn their savings to feed their family. However, now’s the time, you could use this opportunity to wisely invest in the market because the market has been looking quite promising for a while now. 

Source: https://economictimes.indiatimes.com/news/newsblogs/union-budget-2021-live-news-nirmala-sitharaman-updates-january22/liveblog/80397129.cms?frmapp=yes&platform=ios 

Picture Courtesy: Unsplash

Andrea D'souza

Doing my bit in creating a better world, without fears or favours.

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