No Income tax on income received on behalf of funds established for annual medical check ups

CBDT has issued a notification giving relief to the salaried class person by exempting the funds withdrawn from the welfare funds established for the purpose of  meeting the cost of annual medical tests or medical checkups of the member, his spouse and dependent children.

Section 23AAA of Income Tax Act exempts income received by any person on behalf of fund esteblished for such purposes notified by the Board in the Official Gazette for the welfare of employees or their dependents subject to fulfillment of certain conditions. The following purposes were notified by CBDT vide notification No.[S.O.672(E) (F. No. 142/16/95-TPL)], DATED 27-7-1995:

 
(1) cash benefits to a member of the fund,–

(a) on superannuation, or
(b) in the event of his illness or illness of his spouse or dependent children, or
(c) to meet the cost of education of his dependent children ; or

(2) cash benefits to the dependants of a member of the fund in the event of the death of such member.
 
 Now the amendment has been made in the above notification of 27-07-1995 whereby a new clause (d) has been added to the above paragraph No 1. This new clause rums as under:

(d)  to meet the cost of annual medical tests or medical checkups of the member, his spouse and dependent children.
Thus now income recieved on behalf of the fund esteblished to give cash benefits to the employees or dependents to meet the cost of annual medical tests or medical checkups of the member, his spouse and dependent children will also be exempted.

Full Notification is produced herebelow for ready reference:

Section 10(23AAA) Of The Income-Tax Act, 1961 – Exemptions – Income Received By Any Person On Behalf Of Fund Established For Welfare Of Employees Or Their Dependents – Notified Purposes/Conditions For Establishment Of Fund – Amendment In Notification No.S.O.672(E), Dated 27-7-1995

Notification No.33/2011[F.No.197/12/2010-ITA-I]/S.O. 1295(E), Dated 3-6-2011

In exercise of the powers conferred by clause (23AAA) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following amendments in the notification of Government of India, Ministry of Finance, number S.O. 672(E) dated the 27th July, 1995, namely :—
In the said notification, in paragraph (1), after clause (c), the following clause shall be inserted, namely:—
(d)  to meet the cost of annual medical tests or medical checkups of the member, his spouse and dependent children.
 
 





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