Mrs.R,wife of R who is employed in G LTD went for bypass surgery in England alongwith her husband.Expenscs on medical treatment of wife and stay outside India of wife and R amounted
.to 7,00,000 as against 6,50,000 permitted by RBI Guidelines.The travel expenses amounted to 1,50,000.All expenses were reimbursed 'by the employer.Assume the gross salary and
income from other sources of the employee are 1,40,000 and 40,000 respectively.The taxable perquisite in this case shall be:
(A)Nil
(B)50,000
(C)2,00,000
(D) 1,50,000
1. According to sec 17(2)(vi), perquisite does not include if the medical expenses incurred abroad for family members if the same was reimbursed by the employee.
2. However, the above provision is subject to two conditions,
i) Expenditure on Medical treatment and stay abroad to the extent allowed by RBI and
ii) Expenditure on travel shall be excluded if the employee's Gross total Income without including the above perquisite does not exceed Rs. 2,00,000.
3. From the above provision we can easily conclude that his Gross Total Income (Rs. 1,40,000 + 40,000= 1,80,000) does not exceed Rs. 2,00,000, so his travel expenses should not form part of perquisite.
4. With respect to Medical Expenditure to the extent allowed by RBI will not form part of Perquisite. So, out of Rs. 7,00,000, Rs. 6,50,000 will not form part of perquisite and the balance Rs. 50,000 will be taxable as perquisites.
5. Solution for the above question would be Rs. 50,000.
Please correct me if the above solution has an alternative view.
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