Page 191 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes under the head “Salaries” (whether due from, or paid or allowed by, one or more
employers) exclusive of the value of all perquisites not provided for by way of
monetary payment, does not exceed one lakh rupees.
Explanation: For the purposes of clause (2):
(i) “hospital” includes a dispensary or a clinic or a nursing home;
(ii) “family”, in relation to an individual, shall have the same meaning as in clause (5) of
section 10; and
(iii) “gross total income” shall have the same meaning as in clause (5) of section 80B;

Self Assessment

Fill in the blanks:

13. …………………………….includes all benefits and amenities provided by the employer to
the employee in addition to salary and wages either in cash or in kind which are convertible
into money.

14. ………………………means the securities as defined in clause (h) of section 2 of the Securities
Contracts (Regulation) Act, 1956 (42 of 1956) and, where employees’ stock option has been
granted under any plan or scheme therefor, includes the securities offered under such plan
or scheme.

15. ……………………… means the value determined in accordance with the method as may
be prescribed.
16. …………………………. means a right but not an obligation granted to an employee to
apply for the specified security or sweat equity shares at a predetermined price.

7.5 Types of Perquisites

Perquisites are broadly categorised into tax-free perquisites, taxable perquisites and perquisites
taxable under specified cases. Let us now discuss each one of these in detail.

7.5.1 Tax-free Perquisites

The value of the following perquisites is not to be included in the salary income of an employee:
1. Medical facilities: It includes the following:
(a) The value of any Medical facility provided to an employee or his family member in
any hospitals, clinics, etc. maintained by the employer.
(b) Reimbursement of expenditure actually incurred by the employee on medical
treatment for self or for his family members in any hospitals, dispensaries etc.
maintained by the Government or local authority or in a hospital approved under
the Central Health Scheme or any similar scheme of the state Government or in a
hospital, approved by the chief commissioner having regard to the prescribed
guidelines for the purposes of medical treatment of the prescribed diseases or
ailments.
(c) Group medical insurance obtained by the employer for his employees (including
family members of the employees) or all medical insurance payments made
directly or reimbursement of insurance premium to such employees who take such
insurance.

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