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Tax Relief on Sum Received for Treatment of Coivd-19

Financial assistance from an employer to an employee or to a person from another for Covid-19 treatment and any ex-gratin payment to family members in event of a person’s death due to the disease will not face any income tax.

In a significant relief for taxpayers hit by the pandemic, the government on Friday announced income tax exemption on any amount received from employer or any other person for medical expenses and financial assistance to family members of the deceased.

The exemption shall be allowed without any limit for the amount received from any other persons, the Central Board of Direct Taxes said.

Such transfers will be exempt from income-tax in FY20 and subsequent years, it said, adding that necessary legislative amendments will be moved in due course.

“We have already announced the free vaccination drive for everyone above 18 years, today another major decision has been taken. There’s income tax concession for payments towards Covid-19 treatment or death,”said minister of state for finance Anurag Thakur.

Industry and sector watchers lauded the government’s decision, saying that the exemptions will provide some respite to many affected taxpayers. “This provider the much needed tax relief to taxpayers, who have suffered from Covid and received monetary help from their employer, friend and extended families, either for treatment of Covid or on account of death of a family member due to Covid,” said Shailesh Kumar, partner at Nangia & Co LLP. S-ET

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