On June 25, 2021, the government announced through a press release that the money received by an individual towards the expenses incurred on the treatment of COVID-19 or on death due to Covid-19 (by family members) would be paid as ex-gratia. as was received. An employer or a relative/well wisher will be exempted from income tax. income tax exemption The budget was notified in 2022. Income tax exemption is effective from FY 2019-20.
As per the notification issued on August 5, CBDT has asked an employee who has received money for treatment of COVID-19 to submit the following documents to his employer:
(i) COVID-19 positive report of the employee or family member, or the medical report if clinically determined to be COVID-19 positive through examination, by a physician treating the person admitted in a hospital or in an inpatient facility;
(ii) all necessary documents of medical diagnosis or treatment for COVID-19 or illness related to COVID-19 of the employee or his family member is suffering within six months from the date on which the employee or his family member is determined as COVID-19 positive; And
(iii) a certification in respect of all expenses incurred on the treatment of the employee or any member of his family for COVID-19 or COVID-19 related illness.
In addition, the CBDT has asked the person to keep a record of the following documents:
a) COVID-19 positive report of the individual or his family member, or the medical report if clinically proven to be COVID-19 positive through examination in a hospital or in an inpatient facility by a treating physician The recruit is determined positively to the individual;
b) all necessary documents of the medical diagnosis or treatment of the person or family member due to COVID-19 or illness related to COVID-19, suffering within six months from the date on which the person is determined as COVID-19 positive;
Along with submitting the above documents to the employer, the CBDT has asked the employee to submit Form No. 1 to the Income Tax Department within nine months from the end of the financial year in which the money is received for treatment of COVID or on 31st December. , 2022, whichever is later.
As per Form No. 1, an employee is required to provide the following details:
- Name, Address, PAN
- Details of diagnosis of being positive for COVID-19 i.e., date and serial number/ID number of the medical report/test report
- Details of medical diagnosis or treatment of the person or any member of his family for COVID-19 or illness related to COVID-19 within six months from the date of his determination as COVID-19 positive, date and number / identity. number of medical reports
- Details of the total expenditure incurred on the treatment of the individual or any member of his family on the treatment of COVID-19 or illness related to COVID-19 (in Rs.)
- the total amount received from any person
- Name, address and PAN of the person from whom the amount is received
- Financial year in which the amount is received
Along with Form no. 1, An employee is required to submit documents like COVID-19 positive report, documents required for medical diagnosis etc. to the Income Tax Department.
Yashesh Ashar, Partner, Bhuta Shah & Co LLP – a Chartered Accountant firm says, “The notification came into force from April 1, 2020, i.e. in line with the amendments for AY 2020-21 (FY 2019-20). Finance Act 2022. Since The press release for exemption was issued on June 25, 2021, there is a possibility that persons receiving such amount would have claimed exemption/TDS credit (if applicable) in the return of AY 2021.- 22 and AY 2022-23. However, the process of refund for persons receiving such income and who had offered tax in AY 20-21 is not clear.”