Note

1. If an employee dies due to Covid-19, can a Company pay 3-month's salary to the
deceased family and what are the tax implications for the payment?

Yes, Company can pay as there is no prohibition to such payment.

Circular: No. 573, dated 21-8-1990 states that clarifications have been sought from
the Central Board of Direct Taxes whether a lump sum payment made gratuitously or
by way of compensation or otherwise, to the widow or other legal heirs of an
employee, who dies while still in active service, is taxable as income under the
Income-tax Act, 1961.

The issue has been examined by the Board and it is clarified that any such lump sum
payment will not be taxable as income under the aforesaid Act.

2. Whether the Wife or Father of the deceased will receive the money raised through Go
Fund Me?

As per the Terms of Service of Go Fund Me, a Campaign Organizer represent,

warrant and covenant that:

 all Donations contributed to your Campaign will be used solely as described in

the materials that you post or otherwise provide;
 if you withdraw donations believed by reasonable Donors to be raised on
behalf of someone other than you (i.e., the Beneficiary), all Donations will be
given to and/or spent on behalf of the Beneficiary;
 you will comply with all relevant and applicable law and financial reporting
obligations, including but not limited to laws and regulations relating to
registration, tax reporting, political contributions, and asset disclosures for
your project;

Since the Company as a Campaign Organizer raised funds towards the deceased
employee’s family, the donation shall be given to the beneficiary as per the
details/reasons posted by the Company for raising such funds.