Cost of annual medical tests exempted under IT Act

Income Tax Department (CBDT)  has given relief to the salaried class person by exempting the funds withdrawn from the welfare funds established for the purpose of  meeting the cost of annual medical tests or medical checkups of the member, his spouse and dependent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 established 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 received on behalf of the fund established 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.

Download Notification No: 33/2011 dated 03-06-2011

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