The central government approved a series of tax exemptions on Friday, providing significant relief to lakhs of people throughout the country in the midst of the coronavirus crisis. These are intended to incentivize businesses and members of the public to support persons with Covid-19 treatment expenditures, as well as those who have lost family members to the virus.
Anurag Thakur, minister of state in the finance ministry, said “Amounts spent for treatment of an employee by an employer or any other person in 2019-20 and following will not be taxed.”
According to the government, any money paid for the treatment of an employee or another person would be exempt from taxation. In layman’s words, the person who pays for the treatment and the person who receives the payment will not be taxed.
“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,” according to a notification from the finance ministry.
Ex-gratia paid by family members of persons who died as a result of Covid-19 will also be free from income tax, according to the government.
According to the announcement, the exemption is unlimited for the amount received from the employer, but it is limited to Rs 10 lakh in aggregate for the amount received from any other individual.
In addition to the tax breaks, the government has extended the deadline for linking PAN and Aadhaar cards by three months.