Will families pay Income Tax on money received from employer or others after Covid death? Check new rule
Income Tax relief has also been provided on any amount received by an employee from the employer or any well-wisher for treatment of Covid-19.
The Central Government on Friday (June 25) announced tax relief for families of those who have lost their lives due to Covid-19 since FY 2019-20. The Government has decided to provide income tax exemption on any amount received by the family of an employee from the employer. Also, exemption up to Rs 10 lakh has been provided for any amount received from any other person other than the employer.
The Ministry of Finance said in a statement, “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.”
The Ministry further said, “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.”
According to the official statement of the Ministry, the exemption will 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.”
No tax on financial help for Covid treatment
Tax relief has also been provided on any amount received by an employee from the employer or any well-wisher for treatment of Covid-19.
“Many taxpayers have received financial help from their employers and well-wishers 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-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 Ministry said.
The Government will soon notify required rule changes to give effect to the above decisions.