Rule 19: Income threshold for overseas medical travel
Rule 19 prescribes ₹8,00,000 as the gross-total-income amount for section 17(3)(b). That clause limits when covered overseas medical travel expenditure can be excluded from perquisites.
Official notified Income-tax Rules, 2026Need advice on Rule 19?
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Rule 19 - Gross total income for purposes of section 17(3)(b)
For the purposes of section 17(3)(b), the prescribed gross total income shall be ₹ 800000.
Introduction
The rule concerns travel expenditure under the specified overseas-treatment provision. It is not a general tax exemption threshold or the separate limit for treatment and stay abroad.
Rule breakdown
Identify the covered expenditure
Section 17(2)(f) describes employer-incurred or reimbursed expenditure on medical treatment abroad, travel and stay for the employee or family member, and travel and stay for one accompanying attendant. Section 17(3) then imposes different conditions on treatment and stay and on travel.
Apply the ₹8,00,000 comparison correctly
Section 17(3)(b) uses gross total income computed before including the said travel expenditure and requires that amount not to exceed the prescribed figure. Exactly ₹8,00,000 does not exceed it; an amount above ₹8,00,000 fails that particular income condition.
The parent section assigns gross total income the meaning in section 122(10). Do not substitute the employee’s net salary or bank receipts for that defined measure.
Distinguish the separate treatment-and-stay condition
The medical-treatment and stay-abroad exclusion is limited to the extent permitted by the Reserve Bank of India under section 17(3)(a). Rule 19 does not replace that condition with a blanket ₹8,00,000 medical-expense allowance.
Classify the invoices and reimbursements so that travel is distinguishable from treatment and stay.
Illustrative threshold comparison
Hypothetical: the employee’s correctly computed gross total income before the relevant travel expenditure is ₹7,80,000. That meets the income condition in section 17(3)(b); the other requirements still need review. At ₹8,20,000, the income condition is not met.
These examples assess the income threshold only. They do not determine the treatment of every item of overseas expenditure.
Documents for the payroll review
Keep the gross-total-income computation, classification of travel and stay costs, employer-payment evidence and treatment-related documentation together. Where an attendant is involved, check the one-attendant description in the parent provision.
Key takeaways
Gross total income
Use the statutory gross-total-income measure, not only salary or take-home pay.
Compute before the travel expenditure
The parent clause requires the comparison before including the said expenditure.
Keep travel separate
Section 17(3)(a) addresses treatment and stay through its distinct RBI-permitted-extent condition.
Practical checklist
- Use gross total income as statutorily defined.
- Compute it before the relevant travel expenditure.
- Keep travel, treatment and stay costs separately identifiable.
Avoid
- Do not call ₹8,00,000 a universal tax-free income limit.
- Do not substitute net salary for gross total income.
- Do not apply the travel threshold as an allowance for every medical cost.
FAQs
Is ₹8,00,000 the maximum medical bill allowed?
No. It is the prescribed gross-total-income threshold for the travel-expenditure condition in section 17(3)(b).
Does the comparison include the relevant travel expenditure first?
No. The parent clause specifies gross total income computed before including that expenditure.
Are treatment and stay governed by the same test alone?
No. Section 17(3)(a) separately limits their exclusion to the extent permitted by the Reserve Bank of India.
Glossary
- Gross total income
- The measure assigned its statutory meaning by sections 17(4)(c) and 122(10).
- Travel condition
- The income-based condition in section 17(3)(b), for which Rule 19 supplies the amount.