If the person dies within 6 months of the positive report, then the benefit of tax exemption will be available. Tax exemption will be given on the amount of compensation in case of death for 6 months from the date on which the person’s report comes positive.
Change in the rule of tax exemption on the amount of compensation in case of death due to Covid-19 (indicative picture)
If someone dies due to the Kovid-19 epidemic, then there is a provision of compensation on that. Compensation is given from the company in which that person works. And the special thing is that there is also a rule to take tax exemption on that compensation amount. covid pandemic In view of this, the government had issued this rule. There is a rule to include the expenditure on the treatment of Kovid in the tax exemption. Not only this, after the death of Kovid, if a well-wisher or relative provides financial help to the victim’s family, then tax exemption can be taken on it. This rule was told in the budget 2022. But now some changes have been made in it.
This rule of tax exemption was implemented from the financial year 2019-20. It said that even if a person takes any such compensation or gets help from a relative, well-wisher, and does not disclose it in the income tax return, then it does not matter. This was said because this amount has been included in the exemption under section 56 of the Income Tax Act. If a person gets financial help under this section, then it will not be counted in the income and there will be no tax on it. Hence, its reporting in the return is also not necessary.
What is CBDT’s rule
Now some changes have been made in this rule. The CBDT has issued a notification in this regard on August 5, saying that if someone has died due to Kovid in someone’s family, then a form and proof will have to be submitted. This form or proof will have to be submitted to the family who has taken compensation from the company after the death of his family member from Kovid. Or have taken financial help from any relative-relative. According to the notification, the families falling in this category will have to submit Form A to their Assessing Officer.
When will you get tax exemption on compensation
The CBDT has also told that there are certain conditions, on compliance of which the amount of compensation or financial assistance will be exempted from tax. The first condition is that if the person dies within 6 months of the positive report, then the benefit of tax exemption will be available. Tax exemption will be given on the amount of compensation in case of death for 6 months from the date on which the person’s report comes positive. If Form A is not submitted by the family members, then no tax exemption will be given on the compensation. To get this exemption, some necessary documents will also have to be submitted.
These reports will be needed
The documents required for tax exemption include the test report of Kovid-19 or the medical report of the doctor in which the patient is found to be positive. If the treatment is done at home, then the report of the doctor who has done the treatment in home isolation. Medical report or death certificate issued by the Medical Practitioner or Government Civil Registration Office will have to be given. It should be written in the report that such a person has died due to Kovid infection. Form A has to be submitted within 9 months of the financial year in which the money is taken, only then will the benefit of tax exemption on compensation or financial help.
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