Tax relief in respect of COVID related receipts and Ex-Gratia payments – Finsmart

Covid 19 has caused hardships to many and even business units have also suffered by loosing their employees to Covid virus

On this background – many employers have offered to provide lump sum compensation to the family members of deceased employee

So there was no clarity regarding taxation of the same earlier which has been brought now

The Central Board of Direct Taxes said that any sum received by taxpayer from employer or any person towards COVID-19 treatment during FY 2019-20 and subsequent years shall be exempt.

Further, in case of death due to COVID-19, ex-gratia payment received by family members of employee from employer shall be fully exempt and exempt upto Rs. 10 lakhs where received from any other person.

This is a good move on the backdrop of hardships endured by family members of deceased employee and the government is proposing to amend the law accordingly

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