## Medical Facility Exemption [Proviso to Section 17(2)]
Who is covered: the employee and 'family' — spouse, children, and dependent parents, dependent brothers/sisters.
### Exempt medical benefits
1. Employer's own hospital — treatment provided to employee/family in a hospital maintained by the employer.
2. Approved hospital reimbursements — treatment costs incurred in:
- Government hospitals & government-approved hospitals,
- Local authority hospitals, or
- Hospitals approved by the government for employee treatment.
- For specified diseases/ailments: treatment in any hospital approved by the Chief Commissioner.
3. COVID-19 treatment — exempt if the employee provides:
- a COVID-19 positive test report,
- medical records (if clinically diagnosed) within 6 months of being diagnosed positive, and
- certification of all treatment expenses.
4. Health insurance — premiums paid or reimbursed by the employer.
5. Medical treatment abroad:
- Medical + stay expenses: exempt to the extent permitted by RBI.
- Travel cost of patient + one attendant: exempt only if the employee's Gross Total Income does not exceed the specified amount (earlier limit ₹2 lakh).
### Important note on personal accident insurance
If an employer takes a personal accident policy for employees and pays the premium, no immediate benefit accrues to the employee — so the premium is not a taxable perquisite.
### Key distinction
Treatment in the employer's own hospital or in approved/government hospitals is exempt. Treatment elsewhere (private unapproved hospitals) does not get this exemption. For overseas travel, the GTI threshold is a hard gate for the travel-cost exemption.