Tax exemption for expenditure on COVID-19 treatment and lumpsum received on death due to COVID-19

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 an employer or from any person for treatment of COVID-19 during FY 2019-20 and
subsequent years.

 

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 arisen 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 income-tax exemption to ex-gratia
payment received by family members of a person from the employer of such person or from other 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.