The WFH Tax Reality
Since the shift to remote work, many employees have spent significant amounts upgrading their home internet, buying ergonomic chairs, and setting up home offices.
A common question during tax season is: Can I deduct these work-from-home expenses from my taxable salary?
The short answer is No.
Why Salaried Employees Can't Claim Expenses
The Income Tax Act treats salaried individuals differently from freelancers or business owners.
If you are a freelancer filing ITR-3 or ITR-4, you can deduct business expenses (like internet, laptops, and office furniture) from your revenue before calculating your taxable profit.
However, for salaried employees, the government provides a flat Standard Deduction (₹75,000 in the new regime, ₹50,000 in the old regime). This flat deduction is meant to cover all employment-related expenses. Because you get this flat deduction, you are not allowed to claim any specific, itemized expenses incurred to perform your job.
The Exception: Employer Reimbursements
While you cannot claim a deduction on your own, you can get a tax benefit if your employer structures your pay correctly.
If your employer provides a "Telephone/Internet Reimbursement" component in your CTC, and you submit actual bills for your broadband connection, the reimbursed amount is tax-exempt.
Similarly, if your employer provides office assets (like a laptop or monitor) for you to use at home, it is not considered a taxable perquisite. However, if they give you a flat "WFH Allowance" in cash without requiring bills, that allowance is fully taxable as salary.
Salaried vs self-employed
| Worker type | Can deduct desk, chair, internet? |
|---|---|
| Salaried employee | No, the standard deduction covers it |
| Freelancer (ITR-3 / ITR-4) | Yes, as business expenses |
A salaried employee cannot itemise home-office costs; the flat standard deduction of Rs 75,000 (new regime) is meant to absorb all such job expenses. Source: Income Tax Act Section 16(ia).
What you should do
- Do not subtract desk, chair or internet costs from your salary
- Ask payroll for a bill-based telephone or internet reimbursement component instead
- Rely on the standard deduction, which the portal applies automatically
Common mistake
Itemising WFH expenses against salary. It clashes with your Form 16 and triggers a mismatch; only the standard deduction applies to salaried filers.
How to File
When filing your ITR, do not attempt to subtract home office expenses from your gross salary. Doing so will result in a mismatch with your Form 16 and trigger a tax notice.
Simply rely on the standard deduction. When you upload your Form 16 to LastMinute ITR, our system automatically applies the correct standard deduction based on your chosen tax regime, ensuring your filing is accurate and compliant.