The government, via a press release dated June 25, 2021, announced that money received by an individual for expenses incurred on the treatment of Covid-19 or as ex-gratia received (by family members) on death due to covid-19 from an employer or any relative/well-wisher would be exempt from income tax. The income tax exemption was notified in Budget 2022.
The income tax exemption is effective from FY 2019-20 onwards. As the income tax benefit was granted retrospectively, hence, if the receiver of the ‘help’ money had not informed the government about the same while filing an income tax return, it was not an issue. This is because the exemption was granted under section 56 of the Income-tax Act, 1961. As per the income tax laws, money received under this section is not considered as income and hence is not required to be reported to the income tax department.
Now, the Central Board of Direct Taxes (CBDT) issued a notification on August 5, 2022, asking family members (of individuals who had passed away due to covid) who had received ex-gratia payment from the employer of the deceased or financial assistance from relatives and other well-wishers, to submit a form and specified proofs.
As per the notification, such family members are required to submit a form called ‘Form A’ to the assessing officer. Further, the CBDT has specified the conditions under which the above-mentioned income tax exemption can be claimed by the family members. The conditions are as follows….Read More
Source By: economictimesShare: