Rule-3A

Rule 3A of Income Tax Rules

Rule 3A of Income Tax Rules

Rule 3A of the Income Tax Rules mentions the diseases for which tax-exemptions are available under the Income Tax Act. In this article, the diseases classified under Rule 3A of Income Tax Rules are mentioned. Taxpayers suffering from diseases which are categorised under Rule 3A can avail special exemptions under the Income Tax Act. For instance, expenditure incurred by an employer for an employee or the employee’s family for treatment of any of the diseases or ailments mentioned in Rule 3A is a tax-free perquisite in the Income Tax assessment of the employee. The benefit of the rule is that when an employer spends any amount for the medical treatment of an employee for any of the diseases specified by this rule, the amount will not be taxable in the Income Tax assessment of the employee.

Diseases and Ailments under Rule 3A of Income Tax Rules

The following diseases and ailments have been classified under Rule 3A:

  1. Cancer
  2. Tuberculosis
  3. Acquired Immunity Deficiency Syndrome (AIDS)
  4. Disease or ailment of the heart, blood lymph glands, bone marrow, respiratory system, central nervous system, urinary systems, liver, gallbladder, digestive system, endocrine glands or the skin, requiring surgical operation.
  5. Ailment or disease of the eye, ear, nose or throat, requiring surgical operation.
  6. Fracture in any part of the skeletal system or dislocation of vertebrate requiring surgical operation or orthopaedic treatment.
  7. Gynaecological or obstetric ailment or disease requiring a surgical operation, caesarean operation or laparoscopic intervention.
  8. Ailment or disease of the organs mentioned in point 4, requiring medical treatment in a hospital for at least three continuous days.
  9. Gynaecological or obstetric ailment or disease requiring medical treatment in a hospital for at least three continuous days.
  10. Burn injuries requiring medical treatment in a hospital for at least three continuous days.
  11. Mental disorder – neurotic or psychotic – requiring medical treatment in a hospital for at least three continuous days.
  12. Drug addiction requiring medical treatment in a hospital for at least seven continuous days.
  13. Anaphylactic shocks including insulin shocks, drug reactions and other allergic manifestations requiring medical treatment in a hospital for at least three continuous days.

Medical Certificate for Rule 3A

Whenever the benefits made available by Rule 3A are claimed by a taxpayer who is filing a return of income, the taxpayer should ensure that a medical certificate is obtained and kept for records. The medical certificate must be issued by the hospital treating the disease or ailment. The certificate should specify the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital should be enclosed together with the certificate.

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