The government on Friday provided tax relief to those who received help from their employers or others for Covid-19 treatment and also offered concessions for ex-gratia payment received by family members of those who died due to the deadly virus.
The Central Board of Direct Taxes said that in case of ex-gratia payment, tax exemption will be provided without any limit for the amount received from the employer, while exemption up to Rs 10 lakh will be available in case of amount received from other persons. The benefit will be available for funds received during fiscal 2019-20 and subsequent years, with the government proposing to amend the law.
Aadhaar-PAN linking deadline extended
Finance minister Nirmala Sitharaman said the two moves will benefit several taxpayers and their families who have received financial help as it will ensure that no income tax liability arises.
"This is a welcome and much needed relief. Taxpayers genuinely faced several difficulties whenever they were hospitalised or otherwise subject to rigorous medication. Covid treatment has also turned out to be a costly affair for a lot of people," said Amit Maheshwari, tax partner at AKM Global. Several tax professionals and individuals had petitioned for relief.
"It will be useful if the government also clarifies if reimbursement for post-Covid complications, such as black fungus and other issues, is covered to avoid any difficulty to individuals," said Kuldip Kumar, partner at consulting firm Price Waterhouse.
He said for those who have paid tax on reimbursement or ex gratia payments received during 2019-20, the government may need to issue instructions as the deadline for filing returns, and revising them, is over. "Employers can heave a sigh of relief as in the absence of such clarification the said spending or reimbursement would have been taxable as employment income and employers were required to withhold tax on the same. From the clarification one would note that it is not only hospitalisation, even treatment at home etc reimbursed by the employer or any other person should not be taxable," Kumar said.
The CBDT also extended the deadline for complying with several requirements — including linking of PAN and Aadhaar, which has been extended by another three months to September 30. Those who have to invest in residential property or specified instruments to avoid paying capital gains tax arising from sale of another property also have time till September to complete the transaction.
The last date of payment of amount under Vivad se Vishwas, which was earlier extended to June 30 has been further extended to August 31, and the additional amount under the dispute resolution scheme can now be paid up to October 31.
Please
click here to read full story on Times of India.