India's top court has approved the government's decision to pay 50,000 rupees ($674; £498) as compensation for every death due to Covid-19.
The Supreme Court's order followed a petition by lawyers seeking compensation under India's disaster management laws.
India has officially recorded more than 447,000 Covid-19 deaths so far.
However, experts believe that up to 10 times more people could have died in the pandemic.
They have arrived at different estimates after examining excess deaths - a measure of how many more people are dying than would be expected compared to the previous few years.
On Monday Justice MR Shah said the "next of kith and kin of the deceased person" shall be paid this compensation within a month of applying. This would be "over and above the amounts paid by the centre and state under various benevolent schemes", he said.
The court added that the compensation should be paid within 30 days after a family submits an application.
In June, petitioners sought the court's intervention in paying compensation to the families of Covid-19 victims.
They said since Covid-19 was "specially" notified as a disaster under India's National Disaster Management Act, compensation should be paid to the victims.
The 2005 law was enacted for efficient management of disasters, including preparation of mitigation strategies, capacity-building and compensation for lost lives, injuries and damaged properties.
The law says monetary assistance of 4,0000 rupees should be paid to family of people who have lost their lives in a disaster.
"We know the government has spent a lot of money in managing the pandemic. But we still think the government should have paid 4,0000 rupees compensation to every affected family according to the law. Or they could have given a higher amount to the poor families and less to the well-to do. They could have bettered it," Gaurav Kumar Bansal, one of the petitioners, told the BBC.
According to the federal government, the compensation will be paid "to the next of kin of the deceased due to Covid-19, subject to cause of death being certified as Covid-19" as per the guidelines. The funds for this compensation will be provided by the states.
At least two states - Kerala and Rajasthan - have said the compensation payouts would put pressure on their exchequers, and that the funds should be provided by the federal government.
"You give funds for hailstorm, floods, etc, so you should now add Covid-19 too. It's not that only one state has been affected by it, it's a pandemic," Govind Singh Dotasara, a minister in Rajasthan, told The Indian Express newspaper.
It is not clear yet how much the governments will have to spend on the payout.
In August, the National Disaster Management Authority (NDMA) - which is headed by the prime minister - wrote to the states saying it was not clear how much money should be set aside for compensation as the pandemic had not ended.
It also said that "financial prudence demands that we plan in a manner that assistance can be provided to larger number of people should the number of deaths rise".
Some states like Karnataka have already announced a higher compensation of 100,000 rupees to the families of a poor family who died of Covid-19. Sixteen families have already been paid so far, according to a report.