Tax Treatment of Perquisites Under Head Salary
Last Updated : Oct. 24, 2017, 12:26 p.m.
Meaning of Perquisite
In general, perquisite means any benefit. In the context of salary income, perquisite means any benefit provided by the employer to the employee.
As per the provisions of the income tax act, perquisite includes:
- The value of rent-free accommodation/concessional rent accommodation provided to the employee by his employer
- The value of any benefit or amenity granted or provided free of cost or at concessional rate in certain specified cases
- Any sum paid by the employer in respect of any obligation of the employee
- Any sum payable by the employer, whether directly or through a fund, other than specified funds like recognised provident fund or an approved superannuation fund or Employees’ Provident Funds, etc, to affect an assurance on the employee’s life or to affect a contract for an annuity
- The value of any specified security or sweat equity shares allotted or transferred, directly or indirectly by the employer or former employer free of cost or at concessional rate to the employee
- The amount of any contribution to an approved superannuation fund by the employer in respect of the assessee, to the extent it exceeds one lakh rupees
- The value of any other fringe benefit or amenity
If an employer is providing any perquisite to his employee, then the value of that perquisite should be computed in the prescribed manner and the same will be taxed in the hands of the employee.
Through this blog, we will learn the methods of valuation of different perquisites.
Value of perquisite in respect of unfurnished accommodation in the hands of a Government Employee
The value of perquisite in the hands of a Government employee in respect of rent-free unfurnished accommodation provided by the employer will be the license fee of such accommodation.
Example
Mr. Kumar is a Central Government employee. The employer (i.e., Government) has provided him with a bungalow for his residence. No rent is being charged by the employer. The fair rent of the bungalow is Rs. 8,400 per month and the licence fee of the bungalow is Rs. 1,000 per month.
In this case, value of perquisite in the hands of Mr. Kumar in respect of rent free accommodation will be Rs. 1,000 per month (being licence fee of the accommodation).
If in the above case, anything is recovered from the employee in respect of the bungalow, then the same should be deducted from the value of perquisite. The balance value (if positive) will be charged to tax in the hands of the employee.
Value of perquisite in respect of unfurnished accommodation in the hands of a non-Government Employee
In this case, the value of perquisite will be computed on the basis of population of the city in which the accommodation is provided and the nature of the accommodation, i.e., whether the accommodation is owned by the employer or is taken on rent by the employer. Valuation will be as follows:
In case of accommodation owned by employer :
| Population of the city where the property is located | Value of perquisite |
|---|---|
| Not exceeding 10 lakhs | 7.5% of the salary |
| Exceeding 10 lakhs but not exceeding 25 lakhs | 10% of the salary |
| Exceeding 25 lakhs | 15% of the salary |
In case of accommodation taken on lease or rent by the employer :
In this case the value of perquisite will be lower of the following:
- Rent of the accommodation paid or payable by the employer; or
- 15% of the salary.
Any amount recovered by the employer from the employee for providing the accommodation will be reduced from the value computed as above.
Note 1 : For the above purpose ―Salary means:
- Salary for the period during which the accommodation was occupied by the employee
- Salary shall be computed on due basis
- If the employee is employed with more than one employer, then salary from all such employers is to be considered
- Salary for this purpose shall include all payments, except the following:
- Dearness allowance, if it is not considered while computing retirement benefits
- Employer ‘s contribution to provident fund account of the employee
- All allowances which are exempt from tax
- Value of perquisites (whether monetary or non-monetary)
- Lump sum payments received at the time of termination of service or superannuation or voluntary retirement, like gratuity, severance pay, leave encashment, voluntary retirement benefits, commutation of pension and similar payments.
Example
Mr. Kumar is a non-Government employee. His employer has provided him with a bungalow for his residence (at Mumbai). No rent is being charged by the employer. The accommodation is owned by the employer. Salary of Mr. Kumar is as follows:
- Basic salary Rs. 18,400 per month
- Dearness allowance (in terms) Rs. 11,600 per month.
What will be the value of perquisite in respect of rent free accommodation provided by the employer?
In this case, the accommodation is owned by the employer and the accommodation is located in Mumbai (population exceeds 25,00,000), hence, value of perquisite will be 15% of salary. Salary will come to Rs. 30,000 (Rs. 18,400 + Rs. 11,600). Thus, value of perquisite will come to Rs. 4,500 per month.
Value of perquisite in respect of provision of Gas, Water or Electricity
The value of the perquisite arising on account of supply of gas, electricity or water to the employee will be the amount paid by the employer to the supplying agency in case where the supply is made from resources not owned by the employer.
If supplies are made by the employer from his own resources without purchasing it from the outside agencies, then the value of the perquisite will be the manufacturing cost per unit incurred by the employer. Where the employee is paying any amount in respect of such services, the amount so paid by the employee shall be deducted from the value so arrived at.
Example
Mr. Sunil is working in Essem Ltd. at a monthly salary of Rs. 84,000. The company has provided with him free gas, water and electricity. The total cost of these supplies to the company amounted to Rs. 8,400 per month. What will be the value of perquisite in respect of supply of free gas, water and electricity by the company?
The value of the perquisite arising on account of supply of gas, electricity or water to the employee will be the amount paid by the employer to the supplying agency in case where the supply is made from resources not owned by the employer. Thus, in this case the value of perquisite will come to Rs. 8,400 per month.
Value of perquisite in respect of provision of educational facility to the members of household of the employee
Perquisite resulting from the provision of educational facility to the members of household of the employee can be classified as follows:
Education facility provided to the children of the employee :
Where the education facility is provided to the children of the employee in an educational institution which is maintained and owned by the employer or where such free educational facilities are provided in any institution due to his being in employment of that employer, then the value of perquisite shall be the cost of such education in a similar institution in or nearby the locality. However, nothing shall be chargeable to tax if the cost of such education (or the value of such benefit) per child does not exceed Rs. 1,000 per month. If the cost of such education facility exceeds Rs. 1,000 per month per child, then the amount in excess of Rs. 1,000 shall be charged to tax.
Education facility provided to the members of household of the employee (other than children of the employee) :
Where the education facility is provided to members of household of the employee in an educational institution which is maintained and owned by the employer or where such free educational facilities are provided in any institution due to his being in employment of that employer, then the value of perquisite shall be the cost of such education in a similar institution in or nearby the locality. The benefit of exemption upto Rs. 1,000 per child per month is available only in respect of the children of the employee and not in respect of any other member of the household.
Education facility provided in any other institution :
Where the educational institution is not covered under above category, the value of the perquisite is required to be determined at the amount of expenditure incurred by the employer in that behalf. The words used in the law are amount of expenditure incurred by the employer in that behalf, and not amount paid by the employer to the educational institution.
It is immaterial whether the employer directly meets the expenses or whether the employee initially incurs the expenses and then gets the amount reimbursed from the employer. Even if the employer reimburses the amount to the employee, it will retain the character of amount of expenditure incurred by the employer in that behalf.
In all the cases discussed above, if any amount is paid by or recovered from the employee, the value of the perquisite should be reduced by the amount so paid or recovered.
Other points to be noted in this regard :
- Amount spent by the employer for providing free training to the employee is not taxable in the hands of the employee
- Reimbursement of expenditure incurred for the education of the children/members of the household of the employee is taxable as a perquisite in the hands of employee
- School fees of the children/family members of the employees, paid by the employer directly to the school will also be charged to tax in the hands of the employee
Example
Mr. Kumar is working in Essem Ltd. at a monthly salary of Rs. 84,000. The children (one boy and one girl) of Mr. Kumar are studying in Mahatma Gandhi Public School. The monthly fees of the school amount to Rs. 2,000 per month per child. Entire fees are reimbursed by the employer. What will be the value of perquisite arising from reimbursement of school fees by the employer?
Value of perquisite arising from reimbursement of school fees by the employer will be the amount of expenditure incurred by the employer in that behalf. Thus, value of perquisite, in this case, will come to Rs. 4,000 per month (Rs. 2,000 per month per child for two children).
Value of perquisite in respect of granting of a interest-free loan by the employer or granting of the loan at a concessional rate of interest:
The value of perquisite arising on account of interest free loan or concessional loan granted by the employer will be computed on the basis of the rate of interest on such loans charged by the State Bank of India as on the 1st day of the relevant previous year, in respect of loans for the same purpose advanced by it (i.e., State Bank of India). The value of perquisite will be determined as follows:
| Particulars | Interest free loan | Concessional loan |
|---|---|---|
| Interest on the respective loan computed on the basis of rate of interest on such loan charged by State Bank of India prevailing on the first day of the previous year | XXXXXX | XXXXXX |
| Less: Amount recovered from the employee for the respective loan | ------------- | XXXXXX |
| Perquisite in respect of interest free or concessional loans | XXXXXX | XXXXXX |
Interest shall be computed on monthly basis by considering maximum outstanding monthly balance.
Suppose the loan is granted on 1-12-2012 and the rate of interest of State Bank of India on such loan as on 1-4-2012 is at 8% per annum, perquisite will be computed by considering 8% as rate of interest. If the employer is recovering interest at 3% per annum, then perquisite will be computed by considering interest rate at 5% per annum (8% – 3%).
Nothing is charged to tax in respect of perquisite arising on account of interest free or concessional loan granted by the employer for medical treatment of specified diseases.
Nothing is charged to tax in respect of perquisite arising on account of interest free or concessional loan granted by the employer where the amount of loan is petty, not exceeding in the aggregate Rs. 20,000. It should be noted that the limit of Rs. 20,000 applies to the aggregate of all loans which are petty and which are taken during a previous year, either by the employee or by a member of his household. The loan may be taken for any purpose.
Example
Mr. Kumar is working in Essem Ltd. On 1-5-2013, the employer has provided him with interest free loan for medical treatment of specified diseases of his spouse. The amount of loan is Rs. 84,000. The SBI lending rate on personal loan (as on 1-4-2012) is 13%. What will be the value of perquisite in respect of interest free loan granted by the employer?
Nothing is charged to tax in respect of perquisite arising on account of interest free or concessional loan granted by the employer for medical treatment of specified diseases. Hence, in the above case there will be no perquisite in respect of interest free loan taken by the employer for medical treatment of specified diseases.
Value of perquisite in respect of granting of use of any movable assets belonging to the employer:
The value of perquisite to the employee resulting from the use by the employee (or any member of his household) of any movable asset (other than assets already specified in Rule 3 and other than laptops and computers) belonging to the employer shall be determined at rate of 10% per annum of the actual cost of such asset to the employer.
If the assets are hired by the employer, the value of perquisite will be the actual amount of rent or charge paid or payable by the employer for the said asset.
The amount calculated as above shall be reduced by the amount, if any, paid by or recovered from the employee for such use.
It should be noted that nothing is charged to tax in respect of computer or laptops provided by the employer to the employee.
Example
Mr. Kumar is working in Essem Ltd. On 1-10-2012, the employer has provided him with free use of television. The cost of television to the employer is Rs. 8,400. The WDV of the television in the books of employer as on 1-4-2012 is Rs. 1,000. What will be the value of perquisite arising in the hands of employee on account of provision of use of television?
The value of perquisite to the employee resulting from the use by the employee (or any member of his household) of any movable asset (other than assets already specified in Rule 3 and other than laptops and computers) belonging to the employer shall be determined at rate of 10% per annum of the actual cost of such asset to the employer.
In the above case, the use of asset is granted on 1-10-2012. Hence, the value of perquisite will be computed from 1-10-2012 to 31-3-2013, i.e., for six months. Value of perquisite @ 10% per annum of Rs. 8,400 will come to Rs. 840 per annum and Rs. 420 for six months.
Value of perquisite in respect of running and maintenance expenses met by the employer in respect of a car owned by the employee
This situation can further be classified as follows:
If car is used wholly for official purpose :
Nothing is charged to tax, if conditions specified in note* given below are satisfied.
If car is used wholly for private purpose of employee or any member of his household :
Value of perquisite will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Actual expenditure incurred or reimbursed by the employer | XXXXX |
| Less: Amount recovered from the employee | XXXXX |
| Value of perquisite (if positive) | XXXXX |
If car is used partly for private purpose of employee or any member of his household and partly for official purpose :
Value of perquisite will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Actual expenditure incurred or reimbursed by the employer | XXXXX |
| Less: Prescribed amount, i.e., Rs. 1,800 per month where the cubic capacity of the engine does not exceed 1.6 litres (i.e., 1600 cc) and Rs. 2,400 per month, if the cubic capacity exceeds 1.6 litres and Rs. 900 per month, if chauffeur is provided. (Higher amount can be deducted, if conditions specified in the note* given below are satisfied) | XXXXX |
| Less: Amount recovered from the employee | XXXXX |
| Value of perquisite (if positive) | XXXXX |
* Note : The employer has maintained complete details of journey undertaken for official purpose which should include date of journey, destination, mileage, amount of expenditure incurred thereon and the employer gives a certificate to the effect that such an expenditure was incurred wholly for performing official duty.
Example
Mr. Kumar owns a car. The running and maintenance expenditures of the car amounting to Rs. 8,400 per month are met by the employer (including driver‘s salary). The car is exclusively used for private purpose. What will be the value of the perquisite in this case?
Value of perquisite in this case will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Actual expenditure incurred or reimbursed by the employer | 8400 |
| Less: Amount recovered from the employee | Nil |
| Value of perquisite (per month) | 8400 |
*Note : The employer has maintained complete details of journey undertaken for official purpose which should include date of journey, destination, mileage, amount of expenditure incurred thereon and the employer gives a certificate to the effect that such an expenditure was incurred wholly for performing official duty.
If car is used wholly for private purpose of employee or any member of his household :
Value of perquisite will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Actual expenditure incurred or reimbursed by the employer | XXXXX |
| Add: 10% per annum of actual cost of car, if car is owned by the employer or actual hire charges, if car is hired by the employer | XXXXX |
| Less: Amount recovered from the employee | XXXXX |
| Value of perquisite (if positive) | XXXXX |
If car is used partly for private purpose of employee or any member of his household and partly for official purpose :
Value of perquisite will be computed as follows:
Value of perquisite will be calculated at the rate of Rs. 1,800 per month where the cubic capacity of the engine does not exceed 1.6 litres (i.e., 1600 cc) or Rs. 2,400 per month, if the cubic capacity of the engine exceeds 1.6 litres and Rs. 900 per month, if chauffeur is provided (nothing is deductible for amount recovered from the employee).
Example
The employer of Mr. Karan has provided him with a motor car for his personal use. The car was bought by the employer in December 2010 for Rs. 8,40,000. Expenditures on running/maintenance of car (including the salary of driver) amounting to Rs. 5,000 per month are met by the employer. What will be the value of perquisite in this case?
The value of perquisite will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Actual expenditure incurred or reimbursed by the employer (@ Rs. 5,000 per month) | 60000 |
| Add: 10% per annum of actual cost of car (10% of Rs. 8,40,000) | 84000 |
| Less: Amount recovered from the employee | Nil |
| Value of perquisite | 1,44,000 |
Value of perquisite in respect of motor car provided by the employer (expenditure on running and maintenance of motor car are met by the employee):
This situation can further be classified as follows:
If car is used wholly for official purpose :
Nothing is charged to tax, if conditions specified in note given below are satisfied.
Note : The employer has maintained complete details of journey undertaken for official purpose which should include date of journey, destination, mileage, amount of expenditure incurred thereon and the employer gives a certificate to the effect that such an expenditure was incurred wholly for performing official duty.
If car is used wholly for private purpose of employee or any member of his household :
Value of perquisite will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| 10% per annum of actual cost of car, if car is owned by the employer or actual hire charges, if car is hired by the employer plus salary paid to chauffeur by the employer, if any | XXXXX |
| Less: Amount recovered from the employee | XXXXX |
| Value of perquisite (if positive) | XXXXX |
If car is used partly for private purpose of employee or any member of his household and partly for official purpose:
Value of perquisite will be calculated at the rate of Rs. 600 per month, where the cubic capacity of the engine does not exceed 1.6 litres (i.e., 1600 cc) or Rs. 900 per month, if the cubic capacity exceeds 1.6 litres and Rs. 900 per month, if chauffeur is provided (nothing is deductible for amount recovered from the employee).
Example
Mr. Amit is working in Essem Ltd. The employer has provided him with a car (999 cc) along with driver. The car can be used for official purpose as well as for private purpose. The expenditure on running/maintenance (Rs. 8,400 per month) of the car is met by the employee. The car was purchased by the employer in December 1999 for Rs. 2,52,000. What will be the value of perquisite in this case?
In this case, the car can be used for official as well as for private purpose and, hence, the value of perquisite will be calculated at the rate of Rs. 600 per month, where the cubic capacity of the engine does not exceed 1.6 litres (i.e., 1600 cc) or Rs. 900 per month, if the cubic capacity exceeds 1.6 litres and Rs. 900 per month, if chauffeur is provided (nothing is deductible for amount recovered from the employee).
The cubic capacity of the car is 999 cc and, hence, perquisite will be valued @ Rs. 600 per month. Driver is also provided by the employer and, hence, value of perquisite will come to Rs. 900 per month in respect of driver and, hence, the value of perquisite will come to Rs. 1,500 per month.
Value of perquisite in respect of perquisite arising on account of running and maintenance expenditure met or reimbursed by the employer in respect of any automotive conveyance (other than car) owned by the employee:
The value of perquisite in above case under different situations will be as follows:
If the vehicle is used wholly for official purpose :
Nothing is charged to tax, if conditions specified in note given below are satisfied.
Note : The employer has maintained complete details of journey undertaken for official purpose which should include date of journey, destination, mileage, amount of expenditure incurred thereon and the employer gives a certificate to the effect that such an expenditure was incurred wholly for performing official duty.
If the vehicle is used partly for private purpose of employee or any member of his household and partly for official purpose :
Value of perquisite will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Actual expenditure incurred or reimbursed by the employer | XXXX |
| Less: Rs. 900 per month [a higher amount can be deducted, if conditions specified in note given above are satisfied] | XXXX |
| Less: Amount recovered from employee | XXXX |
| Value of perquisite (if positive) | XXXX |
Example
The employer of Mr. Kumar is reimbursing him the expenditure on two-wheeler owned by the employee. The vehicle is used for official as well as for private purpose. The expenditure reimbursed by the employer amounts to Rs. 840 per month. What will be the value of perquisite in this case?
In this case, the vehicle is used partly for private purpose and partly for official purpose, thus, the value of perquisite will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Actual expenditure incurred or reimbursed by the employer | 840 |
| Less: Rs. 900 per month | 900 |
| Less: Amount recovered from employee | Nil |
| Value of perquisite (since value is not positive) | Nil |
Value of perquisite in respect of provision of free or concessional meal by the employer
Value of perquisite in respect of food and other non-alcoholic beverages provided in office premises or through non-transferable paid vouchers usable only at eating joints will be as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Cost to the employer in respect of aforesaid items in excess of Rs. 50 per meal | XXXXX |
| Less : Amount recovered from the employee | XXXXX |
| Value of perquisite (if positive) | XXXXX |
Example
The employer of Mr. Kumar is providing him free light refreshment (i.e., tea or non-alcoholic beverages and snacks) during the office hours. What will be the value of perquisite in this case?
Nothing shall be charged in respect of light refreshment (i.e., tea or non-alcoholic beverages and snacks) provided during working hours including working on holidays, overtime, etc. Thus, in above case nothing shall be charged to tax in the hands of the employee in respect of light refreshment provided by the employer during the office hours.
Value of perquisite in respect of provision of credit card by the employer
Value of perquisite arising on account of provision of credit card by the employer will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Expenditure incurred by the employer (See note) in respect of credit card used by the employee or any member of his household | XXXXX |
| Less: Amount recovered from the employee | XXXXX |
| Less: Expenditure incurred for official purposes (*) | XXXXX |
| Value of perquisite (if positive) | XXXXX |
Note : Expenditure will include membership fees, annual fees incurred by the employee/member of his household, which is charged to a credit card (including add-on-credit card), provided by the employer or otherwise paid/reimbursed by the employer.
(*) Expenditure incurred on official purpose will be deducted only if:
- A complete detail of such an expenditure (including the date and nature of expenditure) is maintained by the employer; and
- Employer gives a certificate to the effect that such expenditure was incurred exclusively for performing official duty.
Example
The employer of Mr. Amit has provided him with a credit card. The card is used by Mr. Amit for his personal shopping. Total monthly bill of the card for the month of April 2013 came to Rs. 8,400 which was paid by the employer. What will be the value of perquisite in this case?
Value of perquisite arising on account of provision of credit card by the employer will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Expenditure incurred by the employer in respect of credit card used by the employee or any member of his household | 8400 |
| Less: Amount recovered from the employee | Nil |
| Value of perquisite | 8400 |
Value of perquisite in respect of provision of club facility by the employer
Value of perquisite arising on account of provision of club facility by the employer will be computed as follows:
| Particulars | Amount (Rs.) |
|---|---|
| Expenditure incurred or reimbursed by the employer in respect of club facility used by the employee or any member of his household | XXXXX |
| Less: Amount recovered from the employee | XXXXX |
| Less: Expenditure incurred for official purposes | XXXXX |
| Value of perquisite (if positive) | XXXXX |
Note :
- Expenditure incurred by the employer will include expenditure incurred or reimbursed by the employer in respect of club facility used by the employee or any member of his household or annual or periodical fees paid or payable to a club.
- Expenditure incurred on official purpose shall be deducted only if:
- A complete detail of such an expenditure (including date and nature of expenditure and its business expediency) is maintained by the employer; and
- Employer gives a certificate to the effect that such expenditure was incurred exclusively for performing official duty.
Nothing shall be charged to tax in respect of :
- Health club, sports and other facilities provided uniformly to all classes of employees by the employer.
- Initial one-time deposit or fees for corporate or institutional membership fees paid by the employer, where benefit does not remain with particular employee after cessation of employment – Circular No. 15/2001, dated December 12, 2001.
Example
Essem Ltd. provides free health club, sports and other facilities uniformly to all classes of its employees. Annual expenditure to the company in respect of this facility amounts to Rs. 8,40,000. There are 1,000 employees in the company. What will be the taxable value of perquisite in the hands of the employees in respect of above facility?
Nothing shall be charged to tax in respect of health club, sports and other facilities provided uniformly to all classes of employees by the employer. Thus, in the above case, nothing will be charged to tax in the hands of the employees of Essem Ltd. in respect of health club facility provided by the company.
Value of perquisite arising on account of gift given by the employer
Value of any gift, gift vouchers, etc., received from the employer by the employee or member of his household, shall be equal to the value of such gift. Nothing shall be charged to tax, if aggregate value of such gift, vouchers, etc., during the previous year does not exceed Rs. 5,000.
Example
During the year 2012-13, the employer of Mr. Kapoor gave him gifts worth Rs. 1,840. In this case what will be the taxable value of perquisite in the hands of Mr. Kapoor in respect of above gifts?
Nothing shall be charged to tax, if the aggregate value of such gifts vouchers, etc., during the previous year does not exceed Rs. 5,000. In this case, the aggregate value of gift is Rs. 1,840, and, hence, nothing will be charged to tax in the hands of Mr. Kapoor.
Value of perquisite arising on account of provision of free use of telephone by the employer
Nothing is taxed in respect of expenses on telephone including a mobile phone actually incurred by the employer on behalf of an employee. Hence, no perquisite will arise in respect of provision of mobile phone to the employee.
Example
The employer of Mr. Kumar has provided him with free use of telephone (mobile). The entire monthly telephone bill will be paid by the employer. What will be the taxable value of perquisite in this case?
Nothing is taxed in respect of expenses on telephone including a mobile phone actually incurred by the employer on behalf of an employee. Hence, in above case nothing will be charged to tax in the hands of Mr. Kumar.
Value of perquisite arising on account of provision of medical facility by the employer
Following are the provisions relating to valuation of perquisite in respect of medical facility provided (in India) by the employer to the employee or any family member (*) of the employee:
(*) Family member for this purpose means spouse/children of the employee, parents, brothers and sisters of the employee or any of them wholly or mainly dependent on the employee.
Nothing will be charged to tax in respect of medical facility provided in a hospital:
- Maintained by the employer,
- Maintained by the Government or local authority or other person but approved by Government for treatment of its employees,
- Approved by the Chief Commissioner having regard to the prescribed guidelines. In this case exemption is available only for treatment of prescribed diseases. A certificate from the hospital specifying nature of disease as well as amount of expenditure should be obtained.
- In respect of medical facility/expenses in any hospital other than discussed in (a) to (c) above, amount of expenditure incurred or reimbursed by the employer in excess of Rs. 15,000 (in aggregate per year) will be value of the perquisite charged to tax in the hands of employee.
Nothing is charged to tax in respect of group medical insurance premium for employees and their family members paid or reimbursed by the employer.