The Hindu Business Line : A tax poser from a CGHS beneficiary

My employer has paid me Rs 25,500, being medical expenses actually incurred by me for medical treatment undergone in a hospital approved under the Central Government Health Scheme (CGHS) during the current year. I am a non-government employee. Will this sum be treated as a perquisite in my hands or will it be exempt under Clause (ii)(a) of the first proviso to Section 17(2) of the Income-Tax Act? The wording of this clause leads my employer to believe that this is only available to government employees. Is this view correct? My employer intends to tax the same during the current year.

C. R. Shubha, Thiruvananthapuram

Your employer's reading of the relevant provision, I am afraid, is wrong. "Any other hospital approved by the Government for the purposes of medical treatment of its employees", is descriptive of the hospital recognised for the purposes of allowing exemption to the reimbursement of expenses incurred therein. These are essentially private hospitals but recognised by the CGHS, when it is not able to provide its own hospital in the vicinity for the benefit of government employees. Such hospitals, approved as they are by the CGHS, are rightly bracketed with government-maintained hospitals, the treatment wherein begets the tax exemption. He simply cannot tax this.

Rent from when?

A building was completed on June 30 of the relevant previous year. Would standard rent be considered for nine months or full twelve months?

D. Rajesh, email

For computation of annual value, standard rent obviously would be the one for the period starting from the day the house property was completed.

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S. Murlidharan

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