Perquisites Exempt Under Section 10

On this page:

  1. Leave Travel Concession
  2. Perquisites Exempt for Indian Citizens Employed Abroad
  3. Perquisite exemption for Tax Paid on Behalf of Any Employee
  4. Perquisite exempt for Medical Facilities

Perquisites Exempt for Leave Travel Concession [section 10(5)]

Exemption is available to the following extent: -

Mode of Travel Exemption available
By Air Economy Fare in National Carrier (Indian Airlines or Air India)
If place of Origin and Destination are connected by Railway line I Class AC Rail Fare
No Rail Facility Available & where recognised public transport System exists I Class or Deluxe Fare on such Recognised Transport System
Other Cases I Class AC Railway Fare, as if Railway line exists

Note:- All the fares are by the shortest route and are only the maximum ceiling. Where actual expenses are lesser than the above fares, then the actual expenses are alone exempt.

The travel concession is available to the Individual, his spouse and children (not more than two surviving children on or after 01.10.1998.

However, the restriction is not applicable to children born before 01.10.1998 and multiple births after a single child), and wholly or mainly dependant - parents, brothers and sisters, in connection with his proceeding: -

  • on leave to any place in India.
  • to any place in India after retirement/termination of service.

The number of trips eligible for exemption is two in a block of four calendar years running from 1986.

The block for the Assessment Year 2011-12 is 01.01.2010 to 31.12.2013.

The immediately preceding block would be 01.01.2006 to 31.12.2009.

In case only one concession or no concession has been availed in any block, then one additional concession can be claimed in the first year of the succeeding block.

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Perquisites Exempt for Indian Citizens Employed Abroad [section 10(7)]

Any perquisite paid or allowed outside India by the Government to a citizen of India for rendering service outside India is exempt.

Perquisites Exempt for Tax Paid on Behalf of Any Employee [SECTION 10(10CC)]

Tax paid on behalf of any employee in respect of non-monetary perquisites received as defined under section 17(2), at the option of the employer, is exempt.

Perquisites Exempt for Medical Facilities [Proviso to Section 17(2)]

The following are the perquisites exempt as per proviso to section 17(2) of the Act: -

  1. the value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer;
  2. any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family: -
    1. in any hospital maintained by the Government or any local authority or any other hospital approved (Refer Circular No.603 dated 06.06.1991 - Annexure B to this Chapter) by the Government for the purposes of medical treatment of its employees;
    2. in respect of the prescribed diseases or ailments, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines, provided the employee attaches with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital;
  3. any portion of the premium paid by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee under any scheme approved by the Central Government or the Insurance Regulatory and Development Authority established under section 3(1) of the Insurance Regulatory and Development Authority Act, 1999 for the purposes of section 36(1)(ib);
  4. any sum paid by the employer in respect of any premium paid by the employee to effect or to keep in force an insurance on his health or the health of any member of his family under any scheme approved by the Central Government or the Insurance Regulatory and Development Authority established under section 3(1) of the Insurance Regulatory and Development Authority Act, 1999 for the purposes of section 80D;
  5. any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family other than the treatment referred to in (i) and (ii); so, however, that such sum does not exceed Rs.15,000 in the previous year;
  6. any expenditure incurred by the employer on -
    • medical treatment of the employee, or any member of the family of such employee, outside India;
    • travel and stay abroad of the employee or any member of the family of such employee for medical treatment;
    • travel and stay abroad of one attendant who accompanies the patient in connection with such treatment,

    subject to the condition that-

    a. the expenditure on medical treatment and stay abroad shall be excluded from perquisite only to the extent permitted by the Reserve Bank of India; and

    b. the expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before including therein the said expenditure, does not exceed Rs.2,00,000

  7. any sum paid by the employer in respect of any expenditure actually incurred by the employee for any of the purposes specified in clause (vi) subject to the conditions specified in or under that clause.

For this purpose of Perquisites Exempt: -

Hospital includes a dispensary or a clinic or a nursing home;

family, in relation to an individual, shall have the same meaning as in section 10(5) [discussed below]; and

gross total income shall have the same meaning as in section 80B(5).

Prescribed Diseases or Ailments for this purpose of Perquisites Exempt u/s section 17(2)

As per Rule 3A(2), for the purpose of clause (ii)(b) of the proviso to section 17(2)(vi), the prescribed diseases or ailments shall be the following, namely:-

  1. cancer;
  2. tuberculosis;
  3. acquired immunity deficiency syndrome;
  4. disease or ailment of the heart, blood, lymph glands, bone marrow, respiratory system, central nervous system, urinary system, liver, gall bladder, digestive system, endocrine glands or the skin, requiring surgical operation;
  5. ailment or disease of the eye, ear, nose or throat, requiring surgical operation;
  6. fracture in any part of the skeletal system or dislocation of vertebrae requiring surgical operation or orthopaedic treatment;
  7. gynaecological or obstetric ailment or disease requiring surgical operation, caesarean operation or laparoscopic intervention;
  8. ailment or disease of the organs mentioned at (d), requiring medical treatment in a hospital for at least three continuous days;
  9. gynaecological or obstetric ailment or disease requiring medical treatment in a hospital for at least three continuous days;
  10. burn injuries requiring medical treatment in a hospital for at least three continuous days;
  11. mental disorder - neurotic or psychotic - requiring medical treatment in a hospital for at least three continuous days;
  12. drug addiction requiring medical treatment in a hospital for at least seven continuous days;
  13. anaphylactic shocks including insulin shocks, drug reactions and other allergic manifestations requiring medical treatment in a hospital for at least three continuous days.

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Great things are not done by impulse, but by a series of small things brought together. Vincent van Gogh

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