08 March 2013
As per Sec 17 (2) of I T Act the value of perquisites will be NIL if the expenditure borne by the employer in on Medical Treatment of employee or his family member in a hospital either maintained by employer or a Govt. approved Hospital but what will be status when a Central University which is working from a rented portion and is yet to develop its own hospital and in certain cases employees and their family members under emergent situation are forced to take treatment in private hospital. Whether the amount reimbursed to the employees for treatment in private hospital may be excluded for taxable income?
This section covers only treatment of specified disease, so u need to also ensure whether treatment taken is for specified disease or not.
Every organisation doesnt have their owned hospitals so in that case treatment should be taken in only govt. specified / approved hospitals only, else expenses incurred by employer would fall under purview of perks.
In all cases exp incurred upto 15000 is can be claimed as non perks irrespective of disease & place of treatment i.r. pvt / public hospital.
Chief Commissioner having regard to the prescribed guidelines in respect of prescribed diseases may approve treatment in pvt hospitals so you can also check with this option too.
08 March 2013
Agreed with Mr. Vaibhav but wish to clarify further:
As per Sec 17, any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family—
(a) in any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees;
(b) in respect of the prescribed diseases or ailments, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines :
Provided that, in a case falling in sub-clause (b), the employee shall attach with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital;]
Hence, I think the requirement of being hospital approved by CIT is applicable only in case of specified diseases and no perquisites values would charged in other cases where treatment has been done in any private hospital approved by any local authority ( generally are the hospitals use to be approved by state governments )
It seems I overlooked some facts; the exemption is available only when treatment has been done in a hospital maintained by government/local authorities and not hospital approved by the government/local authorities.
CAclubindia
