ITR filing: All you need to know about claiming deductions for Covid-19 related expenses
- The ex-gratia payment received by an employee’s family members from an employer in case of their death from Covid-19 has been exempted from being taxed without any limit
Coronavirus disease (Covid-19) has wreaked havoc on people’s lives in the country. As underfunded health care infrastructure was overwhelmed with the rising number of Covid-19 cases, people had to bear the brunt. Keeping in mind the financial losses suffered by people as the pandemic raged, the Central Board of Direct Taxes (CBDT) has made certain provisions so that citizens can claim deductions against the expenses incurred in the process of medical treatment.
Here's more about the tax deductions you can claim while filing ITR:
The ex-gratia payment received by an employee’s family members from an employer in case of their death from Covid-19 has been exempted from being taxed without any limit. For financial assistance received from friends and family members, tax exemption will be limited to ₹10 lakh.
“Unfortunately, certain taxpayers have lost their lives 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," CBDT said in a statement.
"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 ₹10 lakh in aggregate for the amount received from any other persons," it added.
Exemptions on health insurance
A tax exemption of up to ₹25,000 can be claimed under Section 80D against the premium paid for a health insurance policy. Health insurance policies bought to cover any Covid-19 related health expenses are also covered under this deduction.