Tax on Money Received for Medical Treatment

Dear Experts! Please guide on the below query.

There was a person suffering from critical health issues which were required high medical expenses. His family approached Ketto Crowdfunding Platform for help. After few days, a good amount of donation was credited to the patient's wife's bank account directly from Ketto (as a donation). The amount was around 25lacs. Out of these, Rs. 5lacs were spent for medical treatment, but unfortunately, the patient died. Now for the unused money, Ketto did not take it back but instead asked the beneficiary to retain it. My question is; what will be the tax treatment for this entire donation money (Rs. 25lacs) on Wife (she is already on a 30% tax slab)?

 

Replies (2)
Quick Summary
This discussion explores the tax treatment of funds received via crowdfunding for medical expenses. A significant donation was made to a patient's wife's account for critical illness treatment. While a portion was used for medical bills, the patient unfortunately passed away. The remaining funds were not reclaimed by the platform, raising questions about their taxability for the beneficiary, particularly under Section 56(1)(vii) of the Income Tax Act.

Government has allowed it to be tax free, provided it was for Covid treatment. For other medical treatment its taxable.

It is taxable under section 56(1)(vii) of income tax act if the amount crossed 50k under income from other sources

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