Appliacbility of FBT

[Guest]

Medical reimbursement to an employeed exceeding Rs. 15000 for treatment in an approved hospital is not taxable in hands of employees. Whether it will be taxable as FBT in hands of employer as employee welfare?

[Surender Gupta]

pl. see question no. 69 of circular no. 8/2005 of income tax circular in this site. As per CBDT this amount is subject to FBT

AI Summary

Fringe Benefit Tax applies where employer-provided medical reimbursements for approved hospital treatment constitute employee welfare benefits. Medical reimbursement for employee treatment in an approved hospital, though not taxable in the hands of the employee, is treated under the relevant tax circulars as subject to Fringe Benefit Tax in the hands of the employer and therefore should be assessed for employer-level liability under the fringe benefit framework.