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"Free Medical Facilities Are Not A Perquisite Under Certain Circumstances"

 

As per proviso to Section 17(2) exemption is available from income tax, on medical facilities for the employee and his family. This exemption would now be available in respect of

(i) Medical facility provided in hospitals, clinics, etc. maintained by the employer;

(ii) Reimbursement by the employer of expenditure incurred by the employee in hospitals, dispensaries, etc. maintained by government, local authority, or in a hospital approved under the central health scheme or a similar scheme of any state government or private hospitals and nursing homes approved by the Chief CIT (for some prescribed diseases);

(iii) Group medical insurance obtained by the employer for his employees (including members of their families) or reimbursement of insurance premium to the employees who take such medical insurance; and

(iv) Reimbursement by employer of amounts spent by the employees in obtaining medical treatment from any doctor, not exceeding in the aggregate to Rs. 15,000 in a year.

As regards medical treatment abroad, the IT Act exempts from tax the actual expenditure incurred on medical treatment, including the expenditure on travel and stay abroad of the patient and of one attendant in cases where an attendant is permitted by the Reserve Bank of India to accompany the patient. The expenditure on travel and stay abroad will be exempt from tax to the extent permitted by the RBI in the case of only those employees whose gross total income, as computed under the Income Tax Act without including the amount reimbursed for expenditure in connection with medical treatment abroad, does not exceed Rs. 2,00,000.
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