Tax exemption given for Treatment and Ex gratia received due to Covid is a huge relief for families suffering from the consequences of pandemics. As we all know, The COVID-19 pandemic in India is part of the global 2019 coronavirus infection pandemic (COVID-19) resulting from severe acute coronavirus syndrome 2 (SARS-CoV-2).
On 30 January 2020, the first COVID-19 case from China in India was reported. Till then, India has the most confirmed cases in Asia. Moreover, India has become the world’s second-most confirmed case (after the US) with 29.3 million cases with COVID-19. Furthermore, 367.081 fatalities with COVID-19, the third-higher deaths (after the US and Brazil).
The situation is drastic, and therefore the Indian government has launched several schemes to help those suffering from Covid. For instance, GST Tax relief in milling, pharma, education and food sectors, GST Tax Rate reduced on COVID-related Medicines and Equipment, etc.
In addition, The Indian Government has also given considerable relief to taxpayers.
For instance, Income Tax due date extended amid COVID-19, GST Return Filing late fee upper limit reduced, etc.
Similarly, The government has now issued a new big relaxation for individuals who faced difficulties while taking covid treatment. It is an exemption of tax on the amount received from employers/ others for Treatment and Ex gratia received due to Covid.
Tax exemption is given for Treatment of Covid-19
Many taxpayers gained financial assistance from their employers and well-wishers to cover their COVID-19 costs. Therefore, A tax exemption has been decided for taxpayer’s medical treatment on amounts received from the employer or any person.
This tax exemption is applicable on receivable amounts for the treatment of COVID-19 in the FY 2019-20 years as well as upcoming years. It is done in order to ensure that this account does not entail a tax burden on people suffering from Covid.
Tax Exemption given for ex-gratia received on death due to COVID-19
Sadly, due to COVID-19, several taxpayers have lost their lives. Employers and prosperous people of such taxpayers have offered their family members financial help. As a result that they may deal with the challenges arising from the abrupt loss of their family’s earners.
However, the government is also extending a helping hand by allowing Income tax exemption on these funds. The government has decided to grant an income tax exemption for Ex-gratia paid to family members or by the employer of that person or by any other individual.
The tax exemption is for FY 2019-20 and subsequent years.
Limit of Tax Exemption
The exemption shall be allowed without any limit for the amount received from the employer. However, the tax exemption is limited to Rs. 10 lakh in total for the amount received for ex-gratia from any other individual.
Moreover, If you want any other guidance concerning ITR Filing, please feel free to talk to our business advisors at 8881-069-069.
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