Government grants further extension in timelines of compliances and has also announced tax exemption for expenditure on COVID-19 treatment and ex-gratia received on death due to COVID-19.
Tax exemption
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 an income-tax exemption to the amount received by a taxpayer for medical treatment from the 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 arising 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 an 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.
Extension of Timelines
In view of the impact of the Covid-19 pandemic, taxpayers are facing inconvenience in meeting certain tax compliances and also in filing responses to various notices. The government has granted further extension in timelines of compliances.
As per the income tax law, individual taxpayers filing ITR-1 or 4 are required to file their return for the previous financial year (2020-21), which ended March 2021, by 31 July 2021. The deadline for companies and firms whose accounts are to be audited is 31 October.
However, now these dates have been extended for the convenience of the taxpayers. Individuals can now file their tax returns for income earned during the financial year 2020-21 by September 30, deadline for companies is November 30.
Last date of linkage of Aadhaar with PAN under section 139AA of the Act, which was earlier extended to 30th June, 2021 is further extended to 30th September, 2021.
EPFO (Employees’ Provident Fund Organisation) extended the deadline for mandatory Aadhaar-linking with universal account number (UAN) of individual subscribers by three months from June 1 to September 1, 2021.
