Page 192 - DCOM301_INCOME_TAX_LAWS_I

Unit 7: Income under the Head Salaries

(d) Reimbursement of medical expenses actually incurred by the employee upto a Notes
maximum of ` 15,000 in the aggregate in a year, in a private hospital for his and his
family.
(e) Any expenditure incurred or paid by the employer on the medical treatment of the
employee or any family member of the employee outside India, the travel and stay
abroad of such employee or any family member of such employee or any travel or
stay abroad of one attendant who accompanies the patient in connection with such
treatment will not be included in perquisites of the employee.

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Caution However, the travel expenditure shall be excluded from the perquisites only
when the employee’s gross total income as computed before including the said expenditure
does not exceed two lakh rupees and further to such conditions and limits as the Board
may prescribe having regard to guidelines, if any, issued by the Reserve Bank of India.
2. Refreshment: The value of refreshment provided by the employer during office hours and
in office premises is fully exempt. Free Meals provided by the employer during working
or business hours or through paid non-transferable (usable only at eating joints) voucher
if its value thereof in either case does not exceed ` 50 will not be treated as income of the
employee.

Notes Free meals provided by the employer during working hours in a remote area or an
offshore installation shall be fully exempt.

3. Subsidized lunch or dinner provided by employer: With effect from assessment year
1996–97, expenditure incurred by employer on provision of food or beverages to employees
either inside or outside the place of work during working hours upto ` 35 per day per
employee will not be treated as income of the employee provided the amount is paid by
the employer directly to the caterer, restaurant, eating place, canteen, etc.
4. Recreational facilities: The value of recreational facilities provided is exempt. However,
the facility should not be restricted to a selected few.

5. Telephone facility: Telephone facility provided at the residence of the employee is exempt
to the extent of the amount of telephone bills paid by the employer when it is used for
official and personal purposes of the employee.

6. The value of transport: The value of transport provided by the employer to the employees
as a group (and not to any individual or a few employees alone) from their place of
residence to the place of work and back in the case of an employer engaged in the business
of carriage of goods or passengers, to his employees either free of charge or at a concessional
rate. Also from the assessment year 1990–91, conveyance facility provided for the journey
between office and residence and back at free of charge or at concessional rate.
7. Personal accident insurance: Payment of annual premium by employer on personal accident
policy affected by him to his employee.
8. Refresher course: Where the employee attends any refresher course in management and
the fees are paid by the employer, the amount spent by employer for the purpose.
9. Free rations: The value of free rations given to the armed forces personnel.
10. Family planning: The amount spent by an employer on the promotion of family planning
amongst its employees.

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