TREATMENT OF MEDICAL FACILITIES (In India) - Proviso to Section 17(2)

TREATMENT OF MEDICAL FACILITIES - Proviso to Section 17(2)


Medical Facilities/Reimbursement in India

The taxability of the expenditure incurred/reimbursed by an employer in connection with medical treatment of the employee or any member of his family in India (Outside-India) has been explained in the table given below:

Status of Hospital Where Treatment Has Been

Provided

Taxability of Expenses

•      Government hospital;

•      Hospital owned by local authority;

•      Hospital owned and maintained by the employer; and

•      Any private hospital approved by the government

Exempt in the hands of the employee

Any private hospital not approved by the government

No amount shall be chargeable to tax if both the conditions listed below are fulfilled:

a)    The private hospital has been approved by the Commissioner of Income Tax; and

b)     Expenditure has been incurred on medical treatment of diseases specified under Rule 3A of Income Tax Rules.

 

Note 1: Where the employee has incurred expenditure on the medical treatment of self or any of his family member and reimbursement is received from the employer, such reimbursement shall be taxable in similar manner.


Note 2: Payment/reimbursement of medi claim insurance premium by an employer for a policy taken in the name of the employee or his family member is exempt in the hands of the employee.


Note 3: Medical allowance received by an employee from his employer is fully taxable.

Note 4: 'Family' for the purposes of medical facilities include:

•   Spouse of the employee;

•   Children of the employee (dependent or independent; married or unmarried);

•   Parents, brothers and sisters of the employee provided they are dependent an him.

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