Big Tax Relief On COVID-19 Expenses Announced By The Government: What It Means For You

In order to provide relief to the taxpayers facing the hardship due to COVID-19, the government has announced certain tax benefits and compliance reliefs for the taxpayers. Here are some of the important announcements that you should know about.

Tax exemption on COVID treatment, deaths

Several taxpayers received financial help from their employers or well-wishers for meeting their expenses incurred in COVID-19 treatment, said the statement, adding that, income tax will be exempted on the amount received by a taxpayer from an employer or from any person.

BCCL

The employers of those taxpayers who died due to COVID-19 had extended the financial assistance to their family members, in order to provide relief amid the difficulties due to the sudden loss of an earning member of the family. To provide further relief to those family members, the government exempted the income tax on the financial aid received from the taxpayer's employer or from any other person.

The government has allowed the exemption without any limit for the amount received from the employer and it will be limited to ? 10 lakh in aggregate for the amount received from any other persons.

Extension of deadlines

Apart from the tax exemptions, the government also extended some of the major tax compliance deadlines, to provide relief to taxpayers amid the COVID-19 pandemic.

TOI

Among the most important deadline extension, the linking of PAN card and Aadhaar card is extended by another three months - i.e., till September 30, 2021. This is the third such extension for linking the two identification documents amid the pandemic.

Other than the last date of PAN-Aadhaar card linking, the time to invest in a residential house for tax deduction is also extended by more than three months and the ｀Vivad se Viswas' payment without interest is extended by two months from June 30 - August 31.

The last date to file the TDS return or tax deducted at source is extended from June 30 to July 15, 2021. The deadline to submit the equalization levy is extended from June 30 to July 31, 2021.

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How to claim the exemption?

'Taxpayers intending to claim the exemption in respect of sums received during FY 2019-20 would need to revise their return of income to claim refund of tax paid. It is expected that government may also extend the due date for filing a revised return for Assessment Year 2020-21....Taxpayers shall have to carefully read the fine print to check the applicable deadlines as diverse set of dates have been prescribed under different sections,'' said Kumarmanglam Vijay, Partner, J Sagar Associates.

PTI

Meanwhile, earlier last month, the Income Tax department announced that hospitals, nursing home, COVID care centres, or similar other medical facilities providing treatment for coronavirus could accept cash payment of ? 2 lakh or more till May 31, 2021, after receiving a valid identity proof such as PAN card or Aadhaar of the patient and the payee.