CBDT Cir No. 24/2022: Covid Treatment Not Perquisite, No TDS Deduction

The Central Board of Direct Taxes (CBDT) provided in a circular dated 7th Dec, that the value of medical treatment furnished to the employee or any member of his family in any hospital that the employer maintained via the employer or any sum furnished via an employer for any expenditure made via the employee on his medical treatment or the treatment of family member would not be considered as “perquisite”, and hence, TDS required not to be deducted on that.

Under section 17(2) of the act, perquisites comprise of a. The value of rent-free accommodation furnished to the employee via his employer, b. Concession value in the case of the rent related to any accommodation furnished to the employee via his employer, c. the advantage value or amenity provided or furnished it free of cost as per the cases: i) through the company to the employee who would be the director of the company, ii) Through the company to an employee who would be the substantial interest in the company iii) Via an employer along with the company to the employee who does not being covered via (a) or (b) above and whose income beneath the head “Salaries” (due from or paid or permitted via, one or more employers), exclusive of the value of all advantage or amenities not furnished for through the method of monetary payment, is more than Rs.50,000.

Read Also: CBDT: Form No.1 & A for Deduction on Covid Medicine Expenses

But the mentioned would not comprise as a prerequisite: a. The value of any medical treatment furnished to the employee or other family member in any hospital that the employer maintained. b. any sum paid via the employer related to any expenditure made via the employee on his medical treatment or the treatment of any family member i) maintained via the government in any hospital or any local authority or any other hospital authorized by the Government for the medical treatment of its employees; ii) regarding the mentioned diseases or ailments, in any hospital authorized via the Principal Chief Commissioner or Chief Commissioner related to the specified procedures; [(c) with regard to any illness concerned to COVID-19 as per these conditions as the Central Government may, via notification in the Official Gazette, prescribe in this behalf.

“This has been inserted as an amendment through Finance Act 2022 with retrospective effect from 01.04.2020 and thus accordingly, applies in relation to the assessment year 2020-2021 and subsequent assessment years. The conditions have been notified vide CBDT Notification No. [S.O. 3703(E)] 90/2022 dated: 05.08.2022,” the circular articulated.