[OMITTED BY CIRCULAR NO. 603, DATED 6-6-1991]
Valuation of perquisites in the form of reimbursement of medical expenses/provision of medical facilities by the employer–Clarification regarding. Circular No. 336 dated 16-4-1982
Circular Number: 376, dated 6-1-1984 [F. No. 200/7/83-IT(AI)]
Subject : Valuation of perquisites in the form of reimbursement of medical expenses/provision of medical facilities by the employer–Clarification regarding. Circular No. 336 dated 16-4-1982
F.No. 200/108/77-IT(AI) provided the clarification that the value of the provision of ordinary medical facilities by an employer to an employee or his family free of charge or reimbursement of such medical expenses to the employee after they are incurred by him is not to be included in the total income of the employee, provided that the amount does not in any financial year exceed one month salary of the employee. Salary for this purpose was to include Dearness Allowance, where paid but was not to include any other allowance/perquisite. The circular was to apply to all classes of employees, including managers/directors.
2. Several representations have been received against this circular. The Central Government has reconsidered the matter and has directed that the reimbursement of medical expenses to an employee/provision of medical facilities by an employer to an employee will be taxable only in excess of Rs. 5,000 per annum.
3. The above clarification will come into force from the year 1983-84, i.e. assessment year 1984-85 onwards.
(Sd.) V.B. Srinivasan
Central Board of Direct Taxes.