The Central Board of Direct Taxes stated that in case of ex gratia fee, tax exemption might be supplied with none restrict for the quantity obtained from the employer, whereas exemption as much as Rs 10 lakh might be obtainable in case of quantity obtained from different individuals. The profit might be obtainable for funds obtained in the course of the monetary 12 months 2019-20 and subsequent years, with the federal government proposing to amend the legislation.
Finance minister Nirmala Sitharaman stated that the 2 strikes will profit a number of taxpayers and their households who’ve obtained monetary assist as it’s going to be certain that no earnings tax legal responsibility arises.
Many tax professionals had petitioned for reduction
Amit Maheshwari, tax companion at AKM International, stated, “This can be a welcome and far wanted reduction. Taxpayers genuinely confronted a number of difficulties at any time when they had been hospitalised or in any other case topic to rigorous remedy. Covid remedy has additionally turned out to be a expensive affair for lots of people.”.
A number of tax professionals and people had petitioned for reduction.
“It will likely be helpful if the federal government additionally clarifies if reimbursement for post-Covid problems, similar to black fungus and different points, is roofed to keep away from any issue to people,” stated Kuldip Kumar, companion at consulting agency Worth Waterhouse, whereas advising people to take care of detailed data and proof of expenditure.
He stated that for individuals who have paid tax on reimbursement or ex gratia funds obtained throughout monetary 12 months 2019-20, the federal government might have to problem directions because the deadline for submitting returns, and revising them, is over.
“Employers can heave a sigh of reduction as within the absence of such clarification the stated spending or reimbursement would have been taxable as employment earnings and employers had been required to withhold tax on the identical. From the clarification one would word that it’s not solely hospitalisation, even remedy at residence and many others reimbursed by the employer or some other individual shouldn’t be taxable,” Kumar stated.
The CBDT additionally prolonged the deadline for complying with a number of necessities. Those that must put money into residential property or specified devices to keep away from paying capital beneficial properties tax arising from the sale of one other property even have time until September to finish the transaction.
The final date of fee of quantity below Vivad se Vishwas, which was earlier prolonged to June 30 has been additional prolonged to August 31, and the extra quantity below the dispute decision scheme can now be paid as much as October 31.
Additional, the deadline for passing evaluation and penalty orders by tax officers, which had been prolonged to June 30, has been stretched by one other three months.