An order issued by the Central Board of Direct Taxes, dated 31 May 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) of the Income-tax Rules, 1962.
This is an approval order issued by the Principal Chief Commissioner of Income-tax, Bihar and Jharkhand, Patna, and not by the Board. It approves M/s Raj Retina and Eye Care Centre, Patel Nagar, Patna (PAN AAGCR6300M) as a hospital for the purposes of sub-clause (b) of clause (ii) of the proviso to clause (viii) of sub-section (2) of section 17 of the Income-tax Act, 1961, read with rules 3A(1) and 3A(2) of the Income-tax Rules, 1962. The approval is confined to treatment of the eye.
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.
Once the hospital holds this approval, any sum paid by an employer in respect of expenditure actually incurred by an employee on his own medical treatment, or that of a member of his family, at this hospital is not treated as a perquisite in the employee's hands for the purposes of sections 15, 16 and 17. The order restricts the benefit to diseases or ailments related to the eye only, expressly excluding ear, nose and throat, as prescribed at serial number (e) under rule 3A(2). It records that the employer will not be liable to deduct tax at source on such sums. The approval is not transferable, applies only to the premises stated, is open to departmental inspection, and may be withdrawn if it was obtained by misrepresentation or if the rule 3A(1) conditions cease to be satisfied.
Section 17(2)(viii) read with its proviso keeps employer-borne medical expenditure outside the perquisite charge where the treatment is taken at a hospital approved by the Principal Chief Commissioner for prescribed diseases. That approval is a precondition, granted hospital by hospital, and it has to be applied for and renewed. This order disposes of this hospital's application. It records that the guidelines in rules 3A(1) and 3A(2) were considered, identifies the ailments covered, and fixes the period for which the department will treat the hospital as approved.
It binds the income-tax department, which must give effect to the approval for the period stated. It does not bind the assessee, and it does not bind a court or the Tribunal. Its practical beneficiaries are employees treated at this hospital and their employers, who may hold the department to it while it stands.
Takes effect from 27.05.2021 and remains in force till 26.05.2024. An application for renewal is to be submitted at least 30 days before expiry of the current approval.
The approval is disease-specific: the eye only, with ear, nose and throat expressly excluded. Treatment of anything else at the same hospital does not get the benefit. The window closed on 26.05.2024, so for any later year a renewal order must be seen before the exemption is claimed. Check also that the treatment was at the approved premises, and keep the bills, since the relief follows expenditure actually incurred.
This approval is not transferable and is applicable only to the premises occupied by the hospital
— the Central Board of Direct Taxes, order, 31 May 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 |
| section 15 | section 15 |
| section 16 | section 19 |
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. This is a Principal Chief Commissioner's order, not a Board order. The signature-block date and the DIN are garbled in the scan, so the date has been taken from the department's own listing (31.05.2021); the order itself states that it takes effect from 27.05.2021. Paragraph 3, on tax deduction at source, is cut off mid-sentence in the scan and the section number reads as '!97' - it cannot be said from the text whether section 192 or section 197 is meant, and no number has been supplied. Much of the body is heavily garbled by OCR, which is why only a short passage has been quoted.