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Thursday, August 05, 2021

Explained: What are the tax, compliance reliefs announced for Covid-related assistance?

The government has announced income tax exemptions for financial assistance received by people from employers and others for treatment of Covid-19. What are the tax exemptions given?

Written by Aanchal Magazine , Edited by Explained Desk | New Delhi |
Updated: June 27, 2021 8:06:38 am
Covid-19 patients are treated at Dalvi Hospital in Shivajinagar, Pune. (Express Photo: Pavan Khengre, File)

In the wake of the Covid-19 pandemic, the government on Friday announced income tax exemptions for financial assistance received by people from employers and others for treatment of Covid-19.

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What are the tax exemptions given?

Tax exemption has been given for ex gratia received by family members of the deceased. If received from employers, the exemption is available without any upper limit, and, if received from others, the exemption will be available up to Rs 10 lakh. The exemptions have been provided for the financial year 2019-20 and subsequent years.

“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 Central Board of Direct Taxes (CBDT) said in a statement.

Necessary legislative amendments for the decisions shall be proposed in due course of time, it added.

Which other compliance deadlines were extended?

The tax department also extended the due date of various compliances, including the last date of linkage of Aadhaar with PAN from June 30 to September 30, 2021 as well as last date for payment under Vivad se Vishwas by 2-4 months.

The last date of payment of the amount under Vivad se Vishwas (without additional amount) which was earlier extended to June 30, 2021 is further extended to August 31, 2021. The last date of payment under Vivad se Vishwas (with additional amount) has been notified as October 31, 2021.

The due date for furnishing TDS statement for the last (January-March) quarter of the 2020-21 has been extended to July 15, from June 30, 2021, while quarterly statement in Form 15CC to be furnished by authorized dealer for remittances made for the June quarter would have to furnished by July 31.

Also, the deadline for furnishing Equalization Levy Statement in Form No. 1 for the financial year 2020-21, has been extended by a month till July 31, 2021, while for processing Equalisation Levy returns the time limit has been extended by 3 months till September 30, 2021.

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