Thanks a lot lakitaa . Your solution worked perfectly for me. By lowering the WiFi router security firewall protection setting to Low (previously it was set to High) , I was successfully able to have a smooth WhatsApp Vedeo and Audio calls using WiFi option , successfully tested both incoming as well as outgoing WhatsApp Video/Audio calls (along with 4G LTE mobile data turned on in parallel to WiFi).
I tried all previous suggestions (turn on Setting -> WhatsApp -> on Local network , turn on Settings -> Privacy -> Local network) and both these important solutions did not help.
Interestingly even after updating iOS version to 14.2 (or 14.2.3 ?) , my iPhone did not have any problem, until the home WiFi router was upgraded to a new Nokia ONT (Fiber modem) plus inbuilt WiFi router combination. Thats why I was not fully convinced with the iOS update itself (which earlier suggestions relating to Local Network setting pointed out). So, its quite likely that recent WiFi router updates or WiFi router settings relating to network security such as FireWall level has interfered with the WhatsApp audio/Video calls. Before modifying the firewall security level (to Low), i did a small experiment viz., using another Android phone as a HotSpot and using that WiFi connection in the iPhone . Surprisingly in this combination, iPhone was successfully able to make both incoming and outgoing audio and video calls. This successful experiment gave me the confidence to lower the WiFi router 's security level setting and then could finally conclude and solve the problem. Thanks a bunch . note: This resolution summary (3 or 4 solutions provided so far) needs to be formally sent out to the Apple dev. / support team community and to that of WhatsApp tech support team. Both companies need to have a clear blog / vlog / tech-note explaining this problem and the potential solution(s).
Note: still we need to find out exactly how the iOS upgrade has exposed these inter-dependent intricacies between router/firewall/OS/hotspot settings. Interesting corner case that has been hiding for long term and just got exposed as part of iOS 14.2 upgrade process. It will be nice if the tech-note or blog explains the technical details for software enthusiasts like me.
Best regards and thanks again.