CA Aashish Ramchand
Valuation of medical facilities – Before discussing the broad provisions, we should keep in mind the following points –
1. Fixed medical allowance is always chargeable to tax.
2. For the purpose of valuation of the perquisite in respect of medical facilities, “family” means –
a) The spouse and children of the individual; and
b) The parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual.
MEDICAL FACILITIES IN INDIA –
The provisions are given below –
1. The perquisite in respect of medical facility provided by an employer in the following hospitals/clinic is not chargeable to tax –
a) Hospital owned/maintained by the employer.
b) Hospital of Central Government/ State Government/ local authority.
c) Private hospital if it is also recommended by the Government for the treatment of Government employees,
d) Specified medical facility (given in rule 3A) in a hospital approved by the Chief Commissioner.
2. Health insurance premium – Medical insurance premium paid on behalf of the employee or reimbursed to the employee by the employer is not chargeable to tax in the hands of the employee.
3. Any other facility in India – Any other expenditure incurred or reimbursed by the employer for providing medical facility in India is not chargeable to tax up to Rs. 15,000 in aggregate per assessment year (fixed medical allowance is fully chargeable to tax). However wef A.y 2019-20 this has been withdrawn and standard deduction of Rs 40,000 is allowed. This standard deduction is allowed in lieu of transport allowance and medical reimbursement.
MEDICAL FACILITIES OUTSIDE INDIA – Any expenditure incurred by the employer (or reimbursement of expenditure incurred by the employee) on medical treatment of the employee or any member of the family of family of such employee outside India subject to the conditions given below –
| Perquisite not chargeable to tax | Conditions to be satisfied |
|
Expenditure shall be excluded from perquisite only to the extent permitted by the Reserve Bank of India.
Expenditure shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before including therein the expenditure on traveling, does not exceed Rs. 2,00,000* |
*Employee should obtain a certificate from the hospital which should specify nature of disease as well as amount of expenditure.
| Perquisite not chargeable to tax | Condition to be satisfied |
|
Expenditure shall be excluded from the perquisite only to the extent permitted by the Reserve Bank of India |
(Author is CA by profession & Co-Founder of Make My Returns (www.makemyreturns.com) & can be reached at [email protected])
(Republished With Amendments)
Dear Sir
Could you please clarify, that a private hospital Like Artemis or Apollo falls under this provision to claim tax relief on loan taken to get family treated.
Many thanks and I wish you health in these difficult times.
nope
In point no. 2 it is mentioned that medical insurance premium reimbursed by employer it is not chargeable at the hands of the employee. My previous employer was reimbursing maximum Rs.4800/- per year on production of receipt of medical insurance paid. This Rs.4800/- were included in total income of the employee. Please clarify.