Tds on salary

This query is : Resolved

NANDU PAREEK (Querist)
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12 June 2012 Dear Sir,

What is the tax treatment in final settlement of a Director , who is expired.
Final settlement includes :
1. Full Medical Expenses/ Hospital exp reimbursed by the company apprx Rs. 15 lacs.
2. Leave encashment paid Rs. 8 lac.
3. Gratuity Rs. 5 lac.

His age was 85 years.

thanks and regards
Nandu Pareek

Ca Anand Dubey

Ca Anand Dubey (Expert)
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12 June 2012 2. leav encashment -exempt
3.Gratuity- exempt

1. Medical exempt if following conditioned satisfied :-
Following facilities will not be included in Income of employee.
Medical facility provided in a hospital,clinic ,dispensary or nursing home maintained by the employer.
Reimbursement of medical expenditure by the employer, incurred by employee on his or treatment of his family member.
in any govt hospital (including dispensary /clinic or nursing home) or
hospital (including dispensary /clinic or nursing home) maintained by Local authority or approved for govt employees .
Value of medical treatment for prescribed diseases or ailments in any hospital approved by the Chief Commissioner of Income tax.For claiming this benefit the employee needs to attach with his income-tax return a certificate from the hospital specifying the disease or ailment and receipt for the amount paid.(from ay 2008-09 nothing is to be attached with ITR form)
Besides, any sum paid by the employer towards medical reimbursement other than as discussed above is exempt up to Rs.15,000/-.
Any portion of premiums paid by the employer for health insurance of the employees(group insurance) under schemes approved by the Government or the Insurance Regulatory and Development Authority.
Any sum paid (reimbursement)by the employer in respect of premium paid by the employee for the health (medi claim policy)of his or his family, under schemes approved by the Government or the Insurance Regulatory and Development Authority that qualifies for deduction under section 80D of the Income-tax Act.
Expenditure incurred by the employer on medical treatment of the employee or his family member for medical treatment.outside India. This includes travel and stay abroad of the employee or the family member plus one attendant who accompanies the patient in connection with the medical treatment. This exemption is subject to the condition that:
the expenditure excluded from the perquisite value shall be to the extent permitted by the Reserve Bank of India;and
the travel expenditure is excluded only if the gross total income of the employee before including such travel expenditure does not exceed Rs. 2 lakhs.

so other than above the medical facility is taxable in hands of employee.Treatment amount ,reimbursement , unapproved /non govt Hospital other than as explained in point no 2 above up to 15000 is not be included in salary and amount in excess of 15000 is to be included in employee salary