Ex-gratia to exemption received by kin of deceased
It also postponed the deadlines for a number of compliances, including the Aadhaar-PAN linking deadline from June 30 to September 30, 2021, and the Vivad se Vishwas payment deadline by 2-4 months. Given the severe impact of the second wave of the Covid pandemic on the economy, the Union government on Friday announced income tax exemptions to financial aids received by people for Covid treatment.
It also provided tax exemption to ex-gratia received by the deceased’s relatives – the exemption is available without any upper limit if the assistance is obtained from employers, and the exemption is available for up to Rs 10 lakh if it is received from others. Many taxpayers have obtained financial assistance from their companies and well-wishers to cover the costs of Covid-19 treatment.
To avoid any income tax liability on this account, the amount received by a taxpayer for medical treatment from an employer or from any person for Covid-19 treatment during FY20 has been agreed to be exempt from income tax.“During FY20 and subsequent years, it has been determined to offer income tax exemption to ex-gratia payments received by family members of a person from his or her employer or from another person on the death of the person on account of Covid-19.
The exemption will be granted without regard to the amount received from the employer and would be restricted to Rs 10 lakh in aggregate. The deadline for payment of Vivad se Vishwas (without additional amounts) was formerly extended to June 30, 2021, but has now been extended to August 31, 2021. The deadline for Vivad se Vishwas (with additional amount) payments has been set for October 31, 2021.