An order issued by the Central Board of Direct Taxes, dated 24 March 2021. Issued under sub-clause (b) of clause (ii) of the proviso to clause (viii) of sub-section (2) of section 17, read with rules 3A(1) and 3A(2).
An approval granted by the Principal Chief Commissioner of Income-tax, Bihar and Jharkhand, Patna to a named hospital. Clause (viii) of section 17(2) sweeps into 'perquisite' any sum paid by an employer towards an employee's medical treatment; the proviso takes such a payment out again where the treatment is at a hospital approved by the Principal Chief Commissioner for the purpose. This document is that approval, given to Maa Ram Pyari Super Speciality Hospital, Ranchi.
This is an order of the Board. An order is issued under a power the Act itself gives the Board — most often section 119, which lets it direct its own officers and, in the cases the section names, relax a requirement. Read the enabling words before deciding how far it reaches: the power is administrative, and it cannot rewrite the charge.
The Principal Chief Commissioner of Income-tax, Bihar and Jharkhand, Patna, having regard to the guidelines prescribed in rules 3A(1) and 3A(2) of the Income-tax Rules, 1962 for the grant of approval to a hospital, grants approval to M/s Maa Ram Pyari Super Speciality Hospital, Harihar Singh Road, opposite Bariatu Petrol Pump, Morobadi, Ranchi 834008, PAN AADCR6616B, for the purposes of sub-clause (b) of clause (ii) of the proviso to clause (viii) of section 17(2). The approval runs from 22.03.2021 to 21.03.2024. It is granted on the footing that the hospital continues to satisfy the requirements of rule 3A(1) and the conditions prescribed.
An employer who meets an employee's medical bills creates a taxable perquisite unless the payment falls within one of the exceptions in the proviso to section 17(2)(viii). One of those exceptions depends on the hospital being approved by the Principal Chief Commissioner for the treatment of the prescribed diseases. The approval is therefore a condition precedent: without it the employee is taxed on what his employer paid. Hospitals apply, and approvals of this kind are the outcome.
The approval is addressed to the hospital, and it works in the assessments of employees treated there and of employers deducting tax on salary. It binds the department to treat the hospital as approved for the stated period. It does not bind the assessee, who must still bring his case within the proviso, and it does not bind the Tribunal or a court.
Approval effective from 22.03.2021 and valid up to 21.03.2024, on a letter dated 24.03.2021.
The approval is time-bound and condition-bound. Check that the treatment falls inside the window and that the hospital was still meeting rule 3A(1), since an approval can be withdrawn. Remember also that approval of the hospital is only one of the conditions in the proviso: the disease and the documentation have to answer the requirement as well before the payment escapes the perquisite charge.
having regard to the guidelines prescribed in rule 3A(1) & 3A(2) of the Income-tax Rules, 1962 for the grant of approval to a hospital, hereby grant approval to M/s Maa Ram Pyari Super Speciality Hospital
— the Central Board of Direct Taxes, order, 24 March 2021. Read it in the department’s own PDF.
| Under the Income-tax Act, 1961 | Now, in the Income-tax Act, 2025 |
|---|---|
| section 17 | section 16, section 17, section 18 |
My employer gave me a concessional staff loan. Is the interest I saved taxable as a perquisite?
My employer gave me a company flat at a low licence fee and now adds a perquisite value to my salary under Rule 3. Can I say there was no concession at all?
My employees exercised stock options but the shares are locked in and non-transferable. Was I supposed to deduct tax on the market value less what they paid?
My employer pays part of the premium on a superannuation policy, but I get nothing unless I stay until retirement. Is that contribution taxable as a perquisite in my hands now?
My Indian contract says my pay is free of Indian tax and the Indian company pays the tax for me. Is that tax itself taxable in my hands?
We pay our salesmen a turnover commission on top of salary and contribute to the provident fund on both. Is the contribution on the commission deductible?
What here is the Board’s and what is ours. The document is the Central Board of Direct Taxes’ own. Its date and the words quoted above are reproduced from the Board’s own PDF, which is here. Everything else on this page is ours: the plain-English account of what the document is and what it does, the reading of which provision it turns on, the note on what to watch, and the choice of cases. Where our account and the document part, the document governs.
An order of the Board binds the department, not you and not a court. The Board writes to its own officers. An assessee may hold the department to an order or an instruction that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves. This is the most common mistake made with this material, and it is worth making twice: a direction of the Board is not a section of the Act.
We did not read all of it. The department’s file returned only part of this document to us, so what is written above is written from the part we could read. Open the PDF before you rely on it.
What we could not settle. The DIN and file number in the header extract as garbled characters and are left blank. The full wording of the conditions attached to the approval could not be transcribed from the scan.