Tax relief on Covid treatment, death compensation; compliance dates extended

In view of the Covid-19 pandemic, the Union Government has announced income tax relief for anyone who received financial support from family, friends, employers or some other persons for treatment of Covid-19 disease, writes ETV Bharat's Deputy News Editor Krishnanand Tripathi.

New Delhi: The Union Government Friday announced income tax relief for anyone who received financial support from family, friends, employers or some other persons for treatment of Covid-19 disease. The income tax relief will also cover the financial assistance or death compensation received by the kith-and-kins of someone who died due to the infection of deadly Covid virus. The income tax department also extended several compliance deadlines, including the deadline for linking PAN with Aadhaar as the country gradually comes out of the local lockdowns imposed by several state governments.

Relief from tax liability

In a statement, the Income Tax department said several taxpayers have received financial help from their employers and well-wishers for meeting their expenses incurred for treatment of Covid-19 and it has been decided to provide income tax exemption for such amount received by a taxpayer in FY 2019-20 and subsequent years. The income tax relief has also been extended to cover the money received by kith-and-kins of someone who died due to Covid-19 virus.

“Unfortunately, certain taxpayers have lost their lives 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 arising due to the sudden loss of the earning member of their family,” said the department.

“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 department added.

IT department said 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 other persons and well-wishers. The government will move necessary legislative amendments in due course of time.

Compliance dates relaxed

The Income Tax department said that taxpayers had been facing difficulty in meeting certain tax compliances and also in filing responses to various notices due to the outbreak of Covid-19 global pandemic. The department announced extension of certain deadlines to ease the compliance burden on taxpayers. Objections to the Dispute Resolution Panel (DRP) and Assessing Officer under section 144C of the Income-tax Act, 1961 for which the last date of filing under that section was June 1 has been extended to August 31.

The statement of deduction of tax for the last quarter of the FY 2020-21 has been further extended to July 15. Similarly, the date for issuing the Certificate of the Tax Deducted at Source (TDS) in Form 16 has been extended to July 15. The last date for linking Aadhaar with PAN number has been further extended to September 30. Similarly, the last date of payment under Vivad se Vishwas (without additional amount) which was earlier extended to June 30 has now been extended to August 31. And the last date of payment under Vivad se Vishwas (with additional amount) has been extended to October 31.