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2014 (4) TMI 1203 - AT - Income TaxLevy of fringe benefit tax - salary paid to employees in the form of medical reimbursement - Held that:- The Hon’ble Finance Minister in its budget speech at the time of introduction of FBT provision has stated that perquisites/benefits which are fully/directly attributable to the employees would continue to be taxed under the existing provisions of Sec. 17(2) of the Act. However, in cases where the benefits are enjoyed collectively by the employees and cannot be attributed to an individual employee, they shall be taxed in the hands of the employer. It is not in dispute that the medical expenses are directly attributable to each employee distinctly and it is not in the nature of collective benefit enjoyed by the employees. The medical reimbursement is definitely a perquisite as per Sec. 17(2) of the Act , though a threshold limit of exemption is provided under clause (v) at ₹ 15,000/-, nevertheless medical reimbursement expenditures are taxable as perquisites. The Circular No. 8 issued by CBDT appears to be in contradiction to the legislative intent on this specific issue. The Coordinate Bench in the case of Bosch Ltd. [2011 (10) TMI 383 - ITAT BANGALORE ] has considering a similar issue, has held that such payments do not attract Fringe benefit tax in the light of the budget speech of the Hon’ble Finance Minister on the floor of Parliament. Thus reimbursement of medical expenditure does not constitute Fringe Benefit as defined in Sec. 115WB - Decided in favour of assessee.
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