Covid 19 has caused hardships to many and even business units have also suffered by loosing their employees to Covid virus
On this background – many employers have offered to provide lump sum compensation to the family members of deceased employee
So there was no clarity regarding taxation of the same earlier which has been brought now
The Central Board of Direct Taxes said that any sum received by taxpayer from employer or any person towards COVID-19 treatment during FY 2019-20 and subsequent years shall be exempt.
Further, in case of death due to COVID-19, ex-gratia payment received by family members of employee from employer shall be fully exempt and exempt upto Rs. 10 lakhs where received from any other person.
This is a good move on the backdrop of hardships endured by family members of deceased employee and the government is proposing to amend the law accordingly
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Maanoj is Co-founder & Director of Growth Strategy & Alliance at Finsmart Accounting. He is an Outsourcing Expert, a People Champion, and a Dynamic Leader with strong Business Strategy and Scaling-up experience. He has incubated businesses, sold & exited ventures; helped build strong enterprises in very diversified verticals like Fintech, HR & Consulting spaces in various CXO capacities over the last 20 years.
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