Shall we get exemption under medical perquisite?
DKTAZILANOM9909
(Querist) 22 January 2015
This query is : Resolved
My query is on the Income Tax exemption on medical treatment.
Case-1
Sec 5.3.14 : Under section 17 of the IT Act, exemption from tax will also be available in respect of:-
(d) reimbursement, by the employer, of the amount spent by an employee in obtaining medical treatment for himself or any member of his family from any doctor, not exceeding in the aggregate Rs.15,000/- in an year;
Case-2
Hon’ble Mumbai ITAT has in the case of Mr. Rajkamal R. Bajaj c/s ACIT has held that Reimbursement of a medical expense is not
perquisite u/s 17(2) of the Act. Brief facts of the case are that The assessee received a sum of Rs.90,090/- towards reimbursement of
medical expenses from the company M/s Bajaj Consultants Pvt. Ltd., wherein, he is a Director and claimed the same as exempt u/s 17(2)
of the Act. The ld. Assessing Officer in view of section 17(2)(vi) brought to tax by treating it as perquisite under the head income from salary
and taxed accordingly.
The Ld CIT(A) restricted the exemption available u/s 17(2)(vi) of the Act amounting to Rs.15,000/- in place of actual expenses incurred at
Rs.90,090/-, while calculating income under the head “income from salary” The claim of the assessee is that the assessee was admitted in
the hospital to carry out angioplasty (angiography). The assessee also submitted the bills of hospital in support of its claim. The expenses
were first incurred by the assessee for treatment of Coronary Angiography cost in Rs.90,090/- and claimed as medical reimbursement as
per the provision of section 17(2), while computing the salary income. In view of these facts, the Hon’ble ITAT held that it is allowable
expenses and cannot be said to be perquisite u/s 17(2) of the Act and allowed the appeal of the assessee.
We are working in a PSU under central govt. Here for any type of medical reimbursement if treatment done in private hospitals ( not approved by our Employer) exceeding Rs. 15000.00 our employer put it in the head of medical perquisite as per IT rule in case-1.
My question is that shall we get relief of medical perquisite as per case-2 judgement?
regards,
TAPAN DAS
T. Kalaiselvan, Advocate
(Expert) 26 January 2015
Reimbursement of medical expenses are generally not termed as perquisites, as he name suggests, it is reimbursement of expenses whether made or not.
Anirudh
(Expert) 26 January 2015
The very recent decision by Mumbai Bench of ITAT in the case of Mr. Rajkamal R. Bajaj c/s ACIT does not appear to be legally sound and travels beyond the provisions in the I.T. Act. It has not given any legal reason for allowing the claim of the assessee.
I am of the strong view that this decision will be appealed against by the Revenue.
Therefore, your case will be covered under Case-I and only to the extent of Rs. 15000/- p.a. will be allowed as exemption and over and above that amount will be taxed in your hands.
Guest
(Expert) 26 January 2015
Consult and Confirm with CA Club India of the same Website whose Email details are just below this Thread for a Professional and Practical reply from Practising Chartered Accountants.
