Tax Relief

Tax relief on monetary assist for COVID therapy; Aadhaar PAN Hyperlink deadline prolonged

No upper limit for voluntary benefits from employers; ₹ 10 lakh limit from other sources

The government has been pushing for the deadline to allow additional time to link Aadhaar to PAN.

The government announced on Friday (June 25) an income tax break for financial aid given to people for COVID treatment. It also granted tax exemption for allowances received from relatives of the deceased. When received by employers, the exemption is available with no cap, and when received by others, the exemption is possible up to ₹ 10 lakh.

The government also extended the due date for linking the Aadhaar card to the Permanent Account Number (PAN) to September 30, as well as the last payment date under “Vivad se Vishwas” by 2-4 months. [The earlier deadline to settle disputes and make payment under the scheme was April 30].

The earlier deadline for linking Aadhaar and PAN was to expire on June 30th. The government has been constantly pushing for the deadline to give extra time to cardholders who have not yet completed the process to link Aadhaar to PAN.

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The deadline by which employers must also provide employees with a certificate of withholding tax (TDS) in Form 16 has been extended from July 15, 2021 to July 31.

Also read: Why COVID Vaccines Are Taxed And Where The Tax Is Going: Nirmala Responds To Mamata’s Letter

“In order to ensure that no income tax liability arises on this account, it was decided to exempt the amount that a taxpayer receives for medical treatment from the employer or from another person for the treatment of COVID-19 in FY20 from income tax following years” the Central Council for Direct Taxation (CBDT) said in a statement.

“It was decided to provide the income tax exemption for the ex gratia payment that a person’s family members receive from that person’s employer or from another person if the person dies from Covid-19 during FY20 and subsequent years.

“In order to ensure that no income tax liability arises on this account, it was decided to exempt the amount that a taxpayer receives for medical treatment from the employer or from another person for the treatment of COVID during FY20 and the following years from income tax “Said the Central Board of Direct Taxes (CBDT) in a statement.

Also read: COVID-19 aid increased spending to 34.50L Cr: Sitharaman

“It was decided to provide the income tax exemption for the ex gratia payment that a person’s family members receive from that person’s employer or from another person if the person dies from Covid-19 during FY20 and subsequent years.

“The exemption is unlimited on the amount received from the employer and the exemption is limited to a total of 10 lakh rupees on the amount received from other people,” she added.

Legislative action on the rulings will be proposed in due course, she added.

The last payment date according to Vivad se Vishwas (with no additional amount), previously extended to June 30th, will be extended further to August 31st. The last payment date according to Vivad se Vishwas (with additional amount) was communicated as October 31, 2021.

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