New 2022 income tax exemption rules for Covid-19 treatment expenses: check conditions, required documents


Income tax exemption for Covid-19 treatment: The Central Board of Direct Taxes (CBDT) recently notified new conditions and a request form for exemption from Covid-19 treatment costs.

In accordance with the notification of August 5, 2022, you will need to submit certain documents to your employer and a form to the tax department to request a tax exemption on money received from an employer or relatives for Covid-19 treatment.

Last year, the central government announced that money received by individuals for treatment of Covid-19 or received ex gratia by family members upon death due to Covid-19 would be exempt from payment. income tax. This was also notified in the 2022 budget. This exemption is effective from the 2019020 financial year.

What the new notification says

According to the August 5 notification, employees who received money for the treatment of covid-19 must submit the following documents to their employer:

  • The individual’s or family member’s positive COVID-19 report, or medical report if clinically determined to be COVID-19 positive through investigations at a hospital or medical facility. hospitalization by a attending physician for a person thus admitted;
  • all necessary documentation of medical diagnosis or treatment of the individual or family member due to COVID-19 or a COVID-19 related illness suffered within six months from the date it was diagnosed determined to be positive for COVID-19.
  • Documents supporting details of the total expenses incurred for the treatment of COVID-19 or a COVID-19 related illness of the person or any family member.

According to the notification, a statement of any amount received for any expense actually incurred by an individual for their medical treatment, or the treatment of any member of their family, for any illness related to COVID-19 for the purposes of clause (XII) of the first reservation of clause (X) of subsection (2) of section 56 of the Income Tax Act 1961 will be checked and provided on Form No 1.

Form 1 includes details such as:

  • details of diagnosis of seropositivity for COVID-19
  • total amount received from any person
  • Name, address and PAN of the person from whom the amount was received
  • Fiscal year in which the amount was received.

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In the event of the death of an individual, the following conditions would apply to claim a tax exemption:

  • the death of the individual must take place within six months from the date of the positive test or the date on which he was clinically determined as a COVID-19 case, for which a sum of money was received by the family member.

The individual’s family member will need to keep a record of the following documents:

  • the person’s positive COVID-19 report, or medical report if clinically determined to be COVID-19 positive as a result of investigations conducted at a hospital or inpatient facility by an attending physician
  • a medical report or death certificate issued by a doctor or government vital statistics office, in which the person’s death is stated to be related to coronavirus disease (COVID-19).

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