Amendment of section 17.
10. In section 17 of the Income-tax Act, in clause (2), in the first proviso, in clause (ii), after sub-clause (b), the following subclause shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2020, namely:––
“(c) in respect of any illness relating to COVID-19 subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf:”.
Notes on Clauses:
Clause 10 seeks to amend section 17 of the Income-tax Act relating to definition of “salary”, “perquisite” and “profits in lieu of salary”.
Clause (2) of the said section, inter alia, provides the definition of the term “perquisite” and proviso to the said clause provides certain exclusions which shall not be part of “perquisite”.
Clause (ii) of the said proviso provides that any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in certain specified cases shall not be part of perquisite.
It is proposed to amend the said clause (ii) to insert a new sub-clause to provide that any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in respect of any illness relating to COVID-19 subject to such conditions, as may be notified by the Central Government in this behalf, shall not be forming part of “perquisite”.
This amendment will take effect retrospectively from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.
