The government on Friday extended deadlines for various income tax compliances. It also stated that the amount paid by an employer to employees and well-wishers for COVID-19 treatment would be exempted from tax.
The finance ministry stated, “In order to ensure that no income tax liability arises on this account, it has been decided to provide income-tax exemption to the amount received by a taxpayer for medical treatment from employer or from any person for treatment of COVID-19 during FY 2019-20 and subsequent years.”
The ex-gratia payment received from employers by family members in case of death of an employee due to COVID-19 would be exempt from income tax as well.
The ministry stated, “In order to provide relief to the family members of such taxpayer, it has been decided to provide income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from other person on the death of the person on account of COVID-19 during FY 2019-20 and subsequent years.”
The exemption shall be allowed without any limit for the amount received from the employer and the exemption shall be limited to Rs 10 lakh in aggregate for the amount received from any other persons.