Dear Arpita,
Earlier, companies used to pay a part of the salary in the form of a soft furnishing allowance to enable their executives to purchase soft furnishings like pillow covers, curtains, etc. However, now it has been made taxable; therefore, nobody is giving this allowance. If some companies are still doing it, they should stop because if they pay it without deducting tax, they will have to pay 33% of the amount as Fringe Benefit Tax, which could be equal to or more than the tax saved by the employee. Therefore, why continue with this allowance.
KKT