The government on Friday extended deadlines for various income tax compliances and also exempted from tax the amount given by an employer to employees for COVID-19 treatment. It also extended, ex-gratia payments received from employers by family members in case of employees’ death due to Covid would be exempt from income tax in fiscal 2019-20 and subsequent years.
The limit for such tax-exempted payment would be Rs 10 lakh in case it is received from any other person. "In view of the impact of the Covid-19 pandemic, taxpayers are facing inconvenience in meeting certain tax compliances and also in filing response to various notices. "In order to ease the compliance burden of taxpayers during this difficult time, reliefs are being provided...," the Central Board of Direct Taxes (CBDT) said in a statement.
The tax department said many taxpayers have received financial help from their employers and wellwishers for meeting their expenses incurred for treatment of COVID-19. "In order to ensure that no income tax liability arises on this account, it has been decided to provide income etax 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," it added. In case of taxing capital gains arising out of transfer of residential house property, the Central Board of Direct Taxes said for relief in taxation, the re-investment deadline would be September 3, 2021 for such capital gains.
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