Medical expenses reimbursement 17(2)

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An employer reimburses the medical expenses of its employee's wife for a normal delivery undertaken in an approved hospital wherein she had to stay in the hospital for 4 days. Will this qualify as tax exempted treatment as per rule 3 (A) or IT Act? If not, is the employer liable to consider this as perquisite within the meaning of section 17(2) and deduct tax from emloyee? Kindly advice...

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As per section  17(2) of the I T Act , medical reimbursement by an employer is not taxable in hand of an employee as perquisite if  treatment of the employee or his family member is done in any of the following hospitals

  1. Hospital maintained by employer.
  2. Central Govt or state or municipal maintained hospital
  3. Any hospital approved by Govt for its employees
  4. For prescribed diseases or ailments, hospitals  approved by Chief Commissioner of Income Tax .

Thus , if the treatment of govt employee’s son was done in govt hospital or approved hospital, reimbursement of any expense without limit is exempt from tax...

 

Aryan, I do not think you got my question right...Among other, Rule 3 (A) says the following:

(g) gynaecological or obstetric ailment or disease requiring surgical operation, caesarean operation or laperoscopic intervention

 (i) gynaecological or obstetric ailment or disease requiring medical treatment in a hospital for at least three continuous days;

Based on this whether only casarean is covered or even normal delivery is covered if the stay in hospital is more than 3 days?


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