FBT on Group Medical Policy

Hi Sanjeev As per Proviso to Sec.17(2), premium paid for Group medical policy is not taxable in the hands of both employer and employee. Therefore, fringe benefit is not levied on premium paid.

Question no. 68 and 70 of CBDT's circular no. 8/2005 dt 29.08.05, twds FBT on payment made by employer for Group Personal accident/workman compensation and Group Health/Medical and Life insurance states that FBT will be leviable on the same as it is covered under the scope of section 115WB(2)(E). However if such expenditure is a statutory obligation, the same would not be liable to FBT.