The Covid-19 pandemic has not only left scores of men and women jobless, but also hit the employers of quite a few organisations – specially engaged in manufacturing and provide of critical commodities – as some Covid-infected staff have either succumbed to the pandemic or have remained absent from work for a lengthy period.
To make certain that they do not shed their employees, quite a few such organisations have extended assisting hands to help the impacted staff.
“Many companies have come forward to support their employees in the ongoing pandemic period by way of bearing their medical expenditure, sending them medical kits at regular interval, arranging the vaccination or Covid-19 test camp at the workplace, etc,” mentioned CA Geetanshu Bhalla, Mentor at The Virtual Compliance.
“However, such initiatives taken by the companies would have tax implication in the hands of employees,” mentioned Bhalla.
So, the government is becoming requested to amend the provisions of the Income tax Act, 1961 to provide the relief to the truthful taxpayers on the concerns which triggers tax liability in the hands of staff by such initiative of the corporations,” informed Bhalla.
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Bhalla lists some of the concerns that triggers tax liability and the ideas offered to the government for relief:
Medical Treatment of Employees in any Hospital
Companies usually have the policy to bear the healthcare price of its staff and of their family members. Such healthcare price borne by the employers is tax-free of charge in the hand of the staff supplied such price incurred either in the government hospital or hospitals authorized by the government.
Considering the ongoing Covid pandemic exactly where taxpayers do not have any solution to pick the hospital of their decision for healthcare therapy, the government ought to amend the aforesaid provision to enable the tax-free of charge therapy on such healthcare price irrespective of no matter whether it is incurred in a hospital authorized by the government, or not.
Medical Treatment of Covid-19 in Home Quarantine
Covid-19 information of India suggests that a massive section of active Covid-19 patients undergo their healthcare therapy in home quarantine.
Medical expenditure incurred by the employer on the healthcare therapy of staff and any of their family members in home quarantine is taxable in the hands of staff. Such expenditure may possibly consist of hotel charges, meals charges, healthcare charges, price of medicine, oxygen provide charges, and so on.
In the light of the truth that patients in home quarantine also undergo the healthcare therapy beneath the supervision of healthcare practitioners and as a result, home quarantine is the extended type of healthcare facilities. Hence, tax free of charge therapy ought to be extended to such healthcare charges in alignment with the price incurred in hospital.
Preventive Healthcare Expenses
Preventive healthcare measures which includes wearing the face mask, PPE kit, working with sanitiser at standard intervals, consuming immunity-boosting edibles, self-quarantine if needs which includes at hotels, and so on is the need to have of the Hour.
Although the earnings tax deduction is out there for the healthcare price, nevertheless, no deduction is out there for meeting the price of preventive healthcare measures.
Prevention is generally greater than remedy. Accordingly, the government ought to introduce the earnings tax deduction on expenditures incurred on preventive wellness measures related to a deduction on account of healthcare expenditure.
Health Kit
Many corporations have began the distribution of wellness kits and other material to its staff to fight against Covid-19 Pandemic on standard intervals. The provision of the Act offers tax free of charge therapy in the hands of staff on such kits only exactly where the aggregate price of all these in the monetary year does not exceed Rs 5,000.
The government ought to extend the tax-free of charge therapy of all such kits in the hand of staff irrespective of the quantity involved.
Threshold Limit of Medical Expenditure
Many healthcare reports recommend that the healthcare therapy of Covid 19 warrants the provide of oxygen on continuous basis for a lengthy period, intensive healthcare care, ventilator, expensive life saving medicine, which usually price in lakhs. Accordingly, the threshold limit of Rs 25,000 for regular citizens and Rs 50,000 for senior citizens supplied for healthcare expenditure u/s 80D of the Act is rather inadequate.
The new earnings tax deduction on account of healthcare therapy of Covid-19 ought to be introduced beneath the Act without having any threshold Limit.
Cash Medical Expenditure
Recently, the government has authorized the payment of healthcare expenditure exceeding Rs 2 lakh in money for Covid-19 patients. However, such relaxation is not made u/s 80D of the Act.
The mode of money payment ought to be permitted for claiming the earnings tax deduction on account of healthcare expenditure incurred for Covid-19 patients.