CBDT issues conditions, forms for income tax exemption on covid 19 relief money

CBDT issues conditions, forms for income tax exemption on covid 19 relief money

The government, through a press release dated June 25, 2021, disclosed the amount of money a person receives as ex-gratia for expenses incurred for treatment of Covid-19 or when they die (by family members) due to COVID-19. employer or any relative/benefactor will be exempted from income tax. Income tax exemption was announced in the 2022 budget.

The income tax exemption is effective from the financial year 2019-20. As the income tax relief is given retrospectively, this was not a problem if the recipient of the “help” money did not report it to the government when filing their income tax return. This is because the exemption is given under Section 56 of the Income Tax Act, 1961. As per income tax laws, the money received under this section is not deemed to be income and therefore no information is required to be reported to the income tax department.

Now the Central Board of Direct Taxes (CBDT) has issued a notification on August 5, 2022 asking the family members (of those who died due to covid) who received ex-gratia payment or financial assistance from the employer of the deceased. providing form and prescribed proofs from relatives and other well-wishers.

As per the notification, such family members are required to submit a form called ‘Form A’ to the assessing officer. Further, the CBDT has laid down the conditions for the exemption of family members from the aforementioned income tax. The conditions are as follows:

a) the death of the individual must have occurred within six months of the date of the positive test or the date of a clinically determined case of COVID-19 for which any amount was received by a family member;

In addition, family members are requested to note the following documents in the notification:

a) a medical report in case of a positive report of an individual for COVID-19 or a medical report in which it is determined that the individual is clinically positive for COVID-19 as a result of investigations conducted by a treating physician in a hospital or inpatient facility;

b) a medical opinion or death certificate issued by a doctor or state civil registration office stating that the person’s death is related to the coronavirus (COVID-19) disease.

Form A must be submitted within 9 months of the end of the financial year in which the money is received or 31 December 2022, whichever is later. So, if you received the money in the financial year 2020-21 (ending on 31st March 2021), you have to submit ‘Form-A’ by the last date 31st December 2022.

Abhishek Soni, CEO, Tax2win.in – an ITR filing firm says, “If the family member does not file form-A prescribed by CBDT by the deadline applicable to him, then such income tax exemption will not be available. To the family member of the person who died due to Covid-19″.

According to the press release, exemption from income tax is carried out without any restrictions on the amount received from the employer. Amount received from any other relatives and well-wishers is exempted only up to Rs 10 lakh.

Soni says, “Income tax exemption for a limit of up to Rs 10 lakh includes money received to meet covid-19 treatment expenses and provide financial assistance to a family member of the deceased.”

Form A to be submitted by an individual requires them to provide the following information:

  • Name, Address, PAN
  • Recipient’s relationship to the deceased
  • Details of positive diagnosis for Covid-19 ie S.No./ Id No.
  • report/test report
  • Details of death due to COVID-19 and medical report or medical report or death certificate issued by a medical practitioner or government civil registration office stating that the death is related to coronavirus disease (COVID-19) i.e. S.No. / Id No. of the medical report
  • Amount received from the deceased’s employer and other person(s).
  • Name, address and PAN number of deceased’s employer:
  • The financial year in which the amount was received
  • The amount received from the employer
  • Name, address and PAN of other person/s
  • The financial year in which the amount was received
  • Amount received from other person/persons
  • Total amount received (both from employer and others)

When submitting form A, the person must attach the above-mentioned documents, i.e. the date of diagnosis and the covid report stating that the date of death is within 6 months, as well as a medical certificate confirming that the death was due to covid-19. .


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