Help for medical treatment by employees to one employee

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2013 Hi All!

Please advise in the following case, the amount will be taxable in the hand of the employee:

In xyz organisation, Mr. A is hospitalised for medical treatment of kidneys and not in a position to resume his duties. All other employees contributed some amount by allowing the employer to deduct from their salary. The employer deducted the amount from other employees and exact amount paid to the ill employee's account.
Rgds,

Sanjay Singhal

Sanjay Singhal (Expert)
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09 January 2013 The amount received by the employee is by means of contributions from various other employees in the organisation. The followings points needs to be considered:

a) Employer is only pooling the funds from the employee and remitting it to the hospital
b) The funds are contributed by other employees and not directly by the employer.
c) Since, funds are contributed by the employee it does not qualify as perquisites in the hands of the employee.

Considering the above facts, the amount received by Mr. A from various other employees is not taxlable in the hand of the employee.

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