Get tax exemption for COVID treatment

August 11, 2022 Finance Talk Valli Sarvani No comments

Many people were hospitalized due to COVID-19. Some others lost their family members. In this context, the Central Board of Direct Taxes (CBDT) issued a notification last week explaining the ways to get tax exemption for COVID-19 treatment.

Those who received ex-gratia on the death of their family members from an employer or any relative would be exempt from income tax.

Employees can get tax exemption on the amount spent for Covid treatment either for themselves or their family members.

The government announced a press release in this regard On June 25, 2021. The income tax exemption for COVID treatment has been in effect from FY 2019-20. The government notified the tax exemption in Budget 2022.

The CBDT, in its latest notification, stated that employees who received money for the treatment from their employer should submit the following documents to their employers:

The COVID-19 positive report, or medical report that confirms COVID-19 infection through clinical investigations, documents related to treatment for Covid within six months from the date after being diagnosed as COVID-19 positive, a certificate of expenditure incurred on the treatment of COVID-19 or disorder associated with it.

In addition to that, employees should submit Form No. 1 to the Income tax department. They should submit within nine months from the end of the financial year in which they actually received the money for the treatment or before December 31, 2022.

They should provide the following details: Name, PAN, and address, details of COVID-19 positive report, diagnosis or treatment and total expenditure incurred on the treatment of COVID-19 or infections associated with the pandemic, the total amount received from a person along with his name, PAN, and address, and the financial year in which they received the amount.

Employees need to submit all necessary documents along with Form No.1 to the income tax department to get tax exemption for the treatment of COVID-19.

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