Income Tax Relief for Covid-19 Treatments
The government said on Friday that
numerous income tax deadlines had been extended, and that the amount paid by an
employer to employees for Covid-19 treatment will be tax exempt.
Ex-gratia payments received by family
members from employers in the event of an employee's death owing to COVID would
also be tax-free in fiscal 2019-20 and later years.
If the payment is received from
someone else, the limit for a tax-free payment is Rs 10 lakh.
Due to the impact of the Covid-19
outbreak, taxpayers are experiencing difficulties fulfilling with some tax
obligations and filing responses to various notices.
"Reliefs are being provided in
order to reduce the compliance load of taxpayers during this rough patch,"
the Central Board of Direct Taxes (CBDT) stated in a statement.
Many taxpayers have received
financial assistance from their employers and well-wishers to cover the costs
of COVID-19 treatment, according to the tax department.
It has been decided to provide
income-tax exemption to the amount received by a taxpayer for medical care from
an employer or from any person for treatment of Covid-19 for FY 2019-20 and
following years, in order to ensure that no income tax liability occurs on this
account," it added.
The CBDT stated that if capital gains
arising from the transfer of residential home property are taxed, the
re-investment deadline for such capital gains will be September 3, 2021.
Section 54 of the Income Tax Act
states that if a taxpayer has a capital gain on the transfer of a residential
house property, the capital gain can be exempt from tax if the taxpayer invests
the capital gain amount in another house property within two years in the case
of a new house purchase or three years in the case of a new house construction
from the date of the original house property transfer.
The CBDT circular now states that if
a two-year period expires between April 1, 2021 and September 29, 2021, it will
be extended until September 30, 2021.
In addition, until August 31, the
deadline for making payments under the Vivad Se Vishwas direct tax dispute
resolution plan has been extended by two months.
Taxpayers, however, have the option
of extending payments until October 31 with additional interest rate.
The deadline for linking a PAN to an
Aadhar card has been extended by three months to September 30, 2021, while the
deadline for employers to provide TDS certificates in Form 16 to employees has
been extended to July 31, 2021, from July 15, 2021.
The deadline for submitting TDS
statements for the final quarter of 2020-21 (January-March) has been extended
to July 15, 2021, from June 30, 2021.
The quarterly statement in Form 15CC
states that an authorized dealer must provide for remittances made in the
June quarter must be furnished by July 31.
In addition, the deadline for filing
an Equalization Levy Statement in Form No. 1 for the fiscal year 2020-21 has
been extended by one month, to July 31, 2021, and the deadline for processing
Equalization Levy returns has been extended by three months, to September 30,
The extension of various deadlines, such as those
for PAN-Aadhaar linking, payment of tax/penalty under the Vivad se Vishwas
scheme, completion of assessment proceedings, completion of penalty
proceedings, registration of charitable trusts and institutions for income tax
exemption, and so on, will give taxpayers and tax authorities more time