| |
| The Tax Publishers2020 TaxPub(DT) 4238 (Ctk-Trib) : (2020) 185 ITD 0077 INCOME TAX ACT, 1961
Section 17 Section 10 Section 201(1)
Where there was no proof of medical expenditure incurred by employees and assessee-employer also could not substantiate that employees had spent allowances received by them for intended purpose, fixed medical allowance given by employer was taxable as salary income and was not exempt under section 10.
|
Income from salary - Taxability of perquisities - No proof of medical expenditure incurred by employees and assessee-employer -
Assessee-bank was a co-operative society and it made salary payments to its employees and also granted 'cash medical benefit', which was exempted under section10. AO alleged that cash medical benefit which was paid as an allowance was taxable under section 15 irrespective of fact that it was paid in addition to, or in lieu of salary. Accordingly, AO calculated TDS liability for short deduction of tax under section 201(1) and interest payable under section 201(1A).Held: Medical allowance is not categorised as an allowance which bear entire exemption and, therefore, medical allowance is a fixed pay provided by an employer, and is fully taxable and employees can claim a tax benefit up to Rs. 15,000 under medical reimbursement on production of bills and supporting document as per section 17(2). Since there was no proof of medical expenditure incurred by employees and assessee-employer also could not substantiate that employees spent allowances received by them for intended purpose, fixed medical allowance given by assessee employer was taxable as salary income.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2011-12 & 2012-13
IN THE ITAT, CUTTACK BENCH
 SUBSCRIBE FOR FULL CONTENT
|