2020 (4) TMI 658

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng the addition by the CIT(A) made u/s.201(1) of the Act by the AO for short-deduction of TDS and interest u/s.201(1A) of the Act. 3. Brief facts of the case are that the assessee-bank is a cooperative society which has been created by the Special Act of the Legislature. A TDS verification was conducted on 19th October, 2012 in the impugned cases and the ITO(TDS) found from the pay bills register, form No.16 and other relevant documents relating to salary payments of the employees of the assessee that 'cash medical benefit' was allowed exemption u/s.10 of the Act by the deductor. The ITO(TDS) noted that under the provisions of Income Tax Act, the cash medical benefit which is paid as an allowance is taxable u/s.15 of the Act irrespective....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....it to officer and employees of LIC of India and has allowed exemption upto Rs. 15,000/- as per the proviso (v) of Section 17(2) of the Act in respect of any expenditure incurred by the officer/employee on his medical treatment or treatment of any member of his family reimbursed by the employer. Therefore, ld. AR vehemently submitted that the lump sum cash medical benefit to officers and employees upto Rs. 15000/- is not chargeable to tax in view of the proviso (v) of Section 17(2) of the Act and also the interest cannot be leviable. Therefore, ld AR submitted that the appeals of the assessee deserves to be allowed. 7. On the other hand, ld. DR relied on the orders of authorities below and submitted that the assessee is to be treated a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... reimbursement of actual expenditure. We find that medical allowance is a fixed allowance paid to the employees of a company on a monthly basis irrespective of whether they submit the bills to substantiate the expenditure or not. However, medical reimbursement is a payment made to employees against specific medical bills submitted by them, subject to entitlement. If employees want to claim tax benefit, they should submit bills for the corresponding amount under medical reimbursement. As per the provisions of Income Tax Act, 1961, medical allowance is not categorised as an allowance which bears entire exemption. Therefore, the medical allowance is a fixed pay provided by an employer, and is fully taxable. Employees can claim a tax benefit up....