It is a perquisite provided to the employee by the employer where in the employer pays for the expenditure actually incurred by the employee for purposes such as medical treatment of the employee or any of his family member, travel and stay abroad of one attendant who accompanies the patient in connection with such treatment.
As Per Section 17(2)(viii)(vii), Of the Income Tax Act, 1961-
17. For the purposes of sections 15 and 16 and of this section,—
(2) “Perquisite” includes—
(viii) the value of any other fringe benefit or amenity as may be prescribed-
Provided that nothing in this clause shall apply to,-
(vii) 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 the purposes of clause (2),-
- ” hospital” includes a dispensary or a clinic 1[ or a nursing home];
- ” family”, in relation to an individual, shall have the same meaning as in clause (5) of section 10; and
- ”gross total income” shall have the same meaning as in clause (5) of section 80B.
Clause (vi) says:
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-
- 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
- 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 two lakh rupees].