The prescribed guidelines under Section 17(2) of the Income Tax Act are as follows:

• Rent-free accommodation under Income Tax Act: The value of rent-free accommodation provided by the employer to the employee is taxable. The value is determined by taking the fair rent of the accommodation as the base and then applying the relevant slab rates.
• Concession in rent under Income Tax Act: The value of any concession in rent given by the employer to the employee is taxable. The value is determined by taking the difference between the fair rent of the accommodation and the actual rent paid by the employee.
• Motor car under Income Tax Act: The value of a motor car provided by the employer to the employee is taxable. The value is determined by taking the actual expenses incurred by the employer on the car, including depreciation, insurance, and maintenance.
• Medical reimbursement under Income Tax Act :Medical reimbursements provided by the employer to the employee are exempt from tax, subject to certain conditions. The conditions are that the reimbursements must be for medical expenses incurred by the employee or his/her family members, and the expenses must be incurred in India.
• Leave travel allowance under Income Tax Act: Leave travel allowance (LTA) provided by the employer to the employee is exempt from tax, subject to certain conditions. The conditions are that the allowance must be used for travel to the employee’s home town, and the amount of allowance must not exceed the prescribed limits.
• Other perquisites under Income Tax Act: There are other perquisites that are taxable under the Income Tax Act. These perquisites include club membership, interest-free loans, and free or concessional education.

The prescribed guidelines under Section 17(2) of the Income Tax Act are complex and may vary depending on the specific circumstances. It is advisable to consult a tax expert to determine the taxability of any perquisite.

• The value of perquisites is taxable in the hands of the employee, regardless of whether the employee actually uses the benefit under Income Tax Act.
• The value of perquisites is added to the employee’s salary or wages for the purpose of calculating Income Tax Act.
• The employer is required to deduct tax at source on the value of perquisites, if the taxable value exceeds a certain threshold amount.

CASE LAWS

• ITO v. Dr. S.S. Bedi (1997) 227 ITR 442 (Cal.): This case held that the value of rent-free accommodation provided to an employee by his employer is taxable under Section 17(2)(i) of the Income Tax Act, even if the accommodation is located in a rural area.
• ITO v. M/s. A.P.P. Industries (2001) 250 ITR 406 (Mad.): This case held that the value of free medical treatment provided to an employee by his employer is taxable under Section 17(2)(vi) of the Income Tax Act, even if the treatment is provided in a hospital outside India.
• ITO v. M/s. IOCL (2005) 278 ITR 278 (Cal.): This case held that the value of free transport provided to an employee by his employer is taxable under Section 17(2)(iii) of the Income Tax Act, even if the transport is provided for the employee’s personal use.
• ITO v. Mr. R.K. Sood (2010) 328 ITR 285 (Del.): This case held that the value of free club membership provided to an employee by his employer is taxable under Section 17(2)(iv) of the Income Tax Act, even if the club is located in a rural area.
• ITO v. Mr. S.K. Aggarwal (2014) 366 ITR 242 (Del.): This case held that the value of free education provided to an employee’s children by his employer is taxable under Section 17(2)(v) of the Income Tax Act, even if the education is provided in a school outside India.

FAQ QUESTIONS

1. What are the prescribed guidelines under section 17(II) of Income Tax Act?

The prescribed guidelines under section 17(II) of Income Tax Act are the requirements that a hospital must meet in order for the medical benefits provided by the employer to the employee in that hospital to be exempt from tax. These guidelines include the following:

* The hospital must be registered with the local authority.

* The hospital must have at least ten iron spring beds.

* The hospital must have at least one properly equipped operation theatre.

* The hospital must have at least one room, if it provides medical service for maternity cases.

* The hospital must maintain certain standards of hygiene and sanitation.

* The hospital must be approved by the Principal Chief Commissioner or Chief Commissioner having regard to the prescribed guidelines for treatment of the prescribed diseases.

2. Who are the beneficiaries of the prescribed guidelines under section 17(II) of Income Tax Act?

The beneficiaries of the prescribed guidelines under section 17(II) of Income Tax Act are the employees and their family members (spouse and children, dependent parents, brothers and sisters) who are provided medical benefits by their employer in a hospital that meets the prescribed guidelines.

3. What are the benefits of the prescribed guidelines under section 17(II) of Income Tax Act?

The benefits of the prescribed guidelines under section 17(II) of Income Tax Act are that the medical benefits provided by the employer to the employee in a hospital that meets the prescribed guidelines are exempt from tax. This means that the employee does not have to pay tax on the value of these benefits.

4. How can I avail of the benefits of the prescribed guidelines under section 17(II) of Income Tax Act?

To avail of the benefits of the prescribed guidelines under section 17(II) of Income Tax Act, the employee must ensure that the hospital where they are receiving medical treatment meets the prescribed guidelines. The employee can verify this by checking with the hospital or by contacting the Principal Chief Commissioner or Chief Commissioner.

Here are some additional things to keep in mind about the prescribed guidelines under section 17(II) of Income Tax Act:

• The exemption is only available for medical treatment in hospitals. It does not apply to treatment in nursing homes, clinics, or other healthcare facilities under Income Tax Act.
• The exemption is also only available for treatment of the prescribed diseases. These diseases are listed in the Income Tax Rules under Income Tax Act.
• The exemption is limited to the actual expenses incurred by the employer for the medical treatment. It does not cover any additional benefits that the employer may provide, such as reimbursement of travel expenses or the cost of medicines under Income Tax Act.