Income-tax Rules, 1962 / Rule 3A

Rule 3A: Medical Treatment Perquisites, Approved Hospitals and Prescribed Diseases

Rule 3A of the Income-tax Rules, 1962 sets out hospital approval standards and a list of prescribed diseases and ailments relevant to the medical treatment perquisite provisions under section 17(2) of the Income-tax Act, 1961.

What does Rule 3A cover?

Under the historical section 17(2) medical perquisite framework, Rule 3A prescribed conditions for approval of certain hospitals by the Chief Commissioner of Income-tax and specified illnesses for which qualifying hospital treatment was relevant. Approval of a hospital, the nature of the treatment and the governing statutory conditions were separate requirements.

Rule 3A(1): Conditions for approval of hospitals

For a hospital other than one providing Indian systems of medicine or homoeopathic treatment, the Chief Commissioner was required to be satisfied that the hospital was registered with the local authority and met the following conditions.

Hospital premises and facilities

1. The hospital must be registered with the local authority, and its building must comply with municipal bye-laws.
2. Rooms must be well ventilated, lighted, clean and hygienic.
3. At least ten iron spring beds must be provided for patients.
4. At least one properly equipped operation theatre must have a minimum floor area of 180 square feet and a separate sterilisation room.
5. Where maternity services are provided, at least one labour room with a minimum floor area of 180 square feet must be available.
6. Aseptic conditions must be maintained in the operation theatre and labour room.
7. A duty room must be provided for nursing staff on duty.
8. Adequate space must be provided for storing medicines, food articles and equipment.
9. Water used in the hospital or nursing home must be fit for drinking.
10. Adequate arrangements must exist for isolating septic and infectious patients.

Required medical equipment

1. High-pressure steriliser and instrument steriliser.
2. Oxygen cylinders and necessary attachments for administering oxygen.
3. Adequate surgical equipment, instruments and apparatus, including intravenous apparatus.
4. A pathological laboratory for blood, urine and stool tests.
5. Electrocardiogram (ECG) monitoring system.
6. Standby generator for power failures.

Doctors, nurses and patient records

1. At least one qualified doctor must be on duty around the clock for every 20 beds or fraction thereof.
2. For hospitals with intensive care units, at least two qualified doctors must be available around the clock exclusively for the ICU.
3. One nurse must be on duty around the clock for every five beds or fraction thereof.
4. For an ICU, at least four nurses must be provided exclusively for every four beds or fraction thereof.
5. Each patient record must include name, address, occupation, sex, age, dates of admission and discharge, diagnosis and treatment.

Rule 3A(1A): Indian systems of medicine and homoeopathy

For approval of hospitals providing Indian systems of medicine or homoeopathic treatment, the historical rule referred to the conditions in the Department of Indian Systems of Medicine and Homoeopathy, Ministry of Health and Family Welfare, Office Memorandum dated 6 June 2002, concerning approval of private hospitals for Central Government Health Scheme beneficiaries and Central Government employees. This was a distinct approval pathway from the general hospital requirements in sub-rule (1).

Rule 3A(2): Prescribed diseases and ailments

The historical rule specified the following conditions for the purposes of the relevant proviso to section 17(2). Where a minimum period of hospital treatment was prescribed, it was an express part of the condition.

1. Cancer.
2. Tuberculosis.
3. Acquired immune deficiency syndrome (AIDS).
4. Diseases or ailments of the heart, blood, lymph glands, bone marrow, respiratory system, central nervous system, urinary system, liver, gall bladder, digestive system, endocrine glands or skin requiring surgical operation.
5. Diseases or ailments of the eye, ear, nose or throat requiring surgical operation.
6. Fracture in any part of the skeletal system or dislocation of vertebrae requiring surgical operation or orthopaedic treatment.
7. Gynaecological or obstetric disease requiring surgical operation, caesarean operation or laparoscopic intervention.
8. Diseases or ailments of the organs listed above requiring hospital medical treatment for at least three continuous days.
9. Gynaecological or obstetric diseases requiring hospital medical treatment for at least three continuous days.
10. Burn injuries requiring hospital medical treatment for at least three continuous days.
11. Mental disorders, neurotic or psychotic, requiring hospital medical treatment for at least three continuous days.
12. Drug addiction requiring hospital medical treatment for at least seven continuous days.
13. Anaphylactic shocks, including insulin shocks, drug reactions and other allergic manifestations, requiring hospital medical treatment for at least three continuous days.

Explanation: Defined medical terms

Qualified doctor

A person holding a degree recognised by the Medical Council of India and registered by the Medical Council of a State, as described in the original rule.

Nurse

A person holding a certificate from a recognised Nursing Council and registered under a law governing nurse registration.

Surgical operation

Includes treatment by modern methods such as angioplasty, dialysis, lithotripsy, laser surgery or cryosurgery.

Practical points for employees, employers and hospitals

For a medical perquisite claim relating to an earlier period, check the law applicable to that tax year, the hospital's approval status at the relevant time, the diagnosed condition, the duration and nature of hospitalisation, and documentary proof of the employer's payment or reimbursement. For current tax years, check the operative provisions and official notifications rather than relying solely on historical Rule 3A wording.

Related reading: Rule 3 on valuation of employee perquisites and Rule 2BB on prescribed allowances.

Article reviewed: 10 October 2026. Historical legal text summarised for reference; consult current official law for compliance.