CBDT announces Covid-19 tax exemptions. These exemptions are for expenditure on Covid-19 treatment and ex-gratia received on death due to Covid-19.

Covid-19 Tax Exemptions on the amount received for medical treatment:

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 an income-tax exemption to the amount received by a taxpayer for medical treatment from an employer or any person for treatment of Covid-19 during FY 2019-20 and subsequent years.

Exemptions to ex-gratia payment received by family members:

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 arising 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 an income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from another person on the death of the person on account of Covid-19 during FY 2019-20 and subsequent years. 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.