In order to provide relief to the taxpayers facing hardship due to Covid-19, the government has announced big income tax benefits and compliance reliefs for the taxpayers. “The Government has granted a further extension of timelines of compliances under Income Tax Act. It has also announced tax exemption for expenditure on COVID-19 treatment and ex-gratia received on death due to COVID-19,” the Ministry of Finance said.
Here are big income tax reliefs announcements that you should know about
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 an employer or from any person for treatment of Covid-19 during FY 2019-20 and subsequent.
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 people 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. Necessary legislative amendments for the above decisions shall be proposed in due course of time.
Extension of Timelines
The due date for furnishing the TDS statement for the last (January-March) quarter of 2020-21 was extended to July 15, from June 30, 2021.
The certificate of tax deducted at source in Form 16 may be furnished on or before July 31, 2021.
The deadline for the linking of PAN card and Aadhaar card has been extended by three months till September 30, 2021.
The compliances to be made by the taxpayers such as investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purpose of claiming any exemption under the provisions contained in Section 54 to 54GB of the Act, for which the last date of such compliance falls between 1st April 2021 to 29th September 2021 (both days inclusive), may be completed on or before 30th September 2021.
The time to invest in a residential house for tax deduction was extended by more than three months and the ‘Vivad se Viswas’ payment without interest is extended by two months from June 30 to August 31.
However, taxpayers will have the option to make payments till October 31 with an additional amount of interest.
Uploading of the declarations received from recipients in Form No. 15G/15H during the quarter ending 30th June 2021, which is required to be uploaded on or before 15th July, 2021, maybe uploaded by 31st August 2021.
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