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Amount Borrowed From Employers, Family And Friends For Covid Treatment, Ex-Gratia To Be Tax Exempt

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In a bid that the amount borrowed from an employer or any other third person for the purpose of Covid 19 treatment is not taxed, there has been taken a decision to allow income tax exemption on this amount. This shall be applicable for FY 2019-20 onwards.

 
Amount Taken From Employers,Family For Covid, Ex-Gratia To Be Tax Exempt

"Unfortunately, certain taxpayers have lost their life due to COVID-19. Employers and well-wishers of such taxpayers had extended financial assistance to their family members so that they could cope with the difficulties arisen due to the sudden loss of the earning member of their family. 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", read the notification released on June 25, 2021. So, whatever financial help has been extended to the deceased employee's family by the employer will also not attract any tax implication.

"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. Necessary legislative amendments for the above decisions shall be proposed in due course of time"., added the release.

Read more about: income tax tax
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