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Taxability of Medical Facilities

U.C Date : 25 Feb 2015

The taxable value of medical facilities provided by an employer to his employee shall be calculated as under

  1. Treatment in hospital maintained by employer
    Medical treatment provided to employee or any of his family members in any hospital maintained by the employer is not chargeable to tax.
  2. Treatment in hospital maintained by Government, Local Authority or any other hospital approved by the Government
    Medical treatment provided to employee or any of his family members in such hospital is not chargeable to tax.
  3. Treatment of prescribed disease in a hospital approved by the Chief Commissioner
    Medical treatment provided to employee or any of his family members for diseases prescribed in Rule 3A in a hospital approved by Chief Commissioner is not chargeable to tax
  4. Health insurance premium paid by employer
    Any portion of premium paid by an employer in order to keep in force health insurance policy of his employee or any of his family members under a scheme approved by Central Government or IRDA for the purpose of section 36(1)(ib)is not chargeable to tax.
  5. Health insurance premium reimbursed by employer
    Any portion of premium reimbursed by an employer in order to keep in force health insurance policy of his employee or any of his family members under a scheme approved by Central Government or IRDA for the purpose of section 80D is not chargeable to tax.
  6. Other medical expenses
    Any amount paid by the employer in respect of the expenditure incurred by an employee on his medical treatment or treatment of any of his family members(except treatment referred in (a) and (b)) is not chargeable to tax upto Rs 15000/-
  7. Medical treatment outside India
    (a)    Medical treatment of employee or any of his family members
    (b)   Travel and stay abroad of the employee or any of his family member and one attendant shall be exempt to the extent permitted by RBI. The exemption is available only if the gross total income of such employee as computed before including this expenditure does not exceed Rs 2,00,000/-

Additional Points:-
1) Hospitals include a dispensary or a clinic or a nursing home.
2) Family means
a)    Spouse and children of that individual
b)    Parents, brothers and sisters of the individual or any of them wholly or mainly dependent on the individual.

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