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Income Tax Relief for Cash Payments over INR 2 Lakh of Covid Bills

With India battling the second wave of Covid-19, the Income Tax Department issued a notification on 7th May 2021, to allow hospitals, dispensaries, nursing homes, COVID care centres or other similar medical facilities to receive cash payments above INR 2 Lakh.

The exemption to this rule is applicable only from 1st April 2021 to 31st May 2021. You must provide the PAN (Permanent Account Number) or Aadhaar Number of the patient, or anyone making the payment on the patient’s behalf and their relationship with them.

Earlier, it was not allowed to receive cash payments above INR 2 lakh, and a penalty u/s 271DA was applicable.

In case you are receiving such cash payments above INR 2 lakh, the requirement to report the same u/s 269ST of the Income Tax Act when filing the Tax Audit report has been relaxed.

The restriction on the receipt of cash payments above INR 2 Lakh came into effect in 2017. The aim was to curb black money flows post demonetization in November 2016.
Anyone receiving cash payment over INR 2 lakh was liable to a penalty u/s 271DA, which was equivalent to the amount received.

We hope strength & safety for everyone during these testing times.

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Got Questions? Ask Away!

  1. I am not expecting a huge increase in salary due to the COVID-19 impact on business, but how can I increase my take-home salary?

  2. Amidst the lockdown, we are all working from home. What are the expenses and allowances I can claim?

  3. Hey @riya_gupta

    These are testing times for everyone.
    You can increase your Net Salary/Take Home Salary by planning your tax-saving investments u/s 80C and other Chapter VI-A deductions.

    This will reduce your taxable income and TDS on Salary. But it is only possible if you provide your investment declaration to your employer correctly in Form 12BB.

    Since it is the beginning of the financial year, it the right time to plan your investments and taxes.

    Hope this helps :slight_smile:

  4. Hey @TanyaChopra

    You can claim allowances like electricity and Wi-Fi expense while working from home during the COVID-19 lockdown.

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