If paid on retirement whether on superannuation or otherwise, amount is exempt from tax to the extent of least of the following:

1. Cash equivalent of leave salary in respect of period of earned leave to the credit of an employee only at the time of retirement whether on superannuation or otherwise.
2. 10 months average salary.
3. The amount not chargeable to tax as specified by Government from time to time (at present Rs. 300,000/-)in case of employees retire whether on superannuation or otherwise on or after 1.4.1998
4. Leave encashment actually received on retirement.

It shall not be a perquisite in the following cases

1. Free meals provided by the employer during office hours at office or business premises or through paid vouchers which are not transferable and are usable only at eating joints,if the value thereof in either case is upto Rs.50 per meal.
2. Tea or snacks provided during office hours.
3. Free meals during working hours provided in a remote area or an offshore installation.

Earlier Rules:
Refreshments/subsidised lunch or dinner
Exempt when provided in the office premises during workinghours. An amount upto Rs. 35 per day if provided outside the place of work and amount is paid by employer directly to caterer,restaurant etc. is exempt.

For employees covered by the Payment of Gratuity Act:
Any gratuity received by employee is exempt from tax to the extent of least of the following:

1. 15 days salary for every completed year of service or part thereof in excess of 6 months.
2. Rs. 3,50,000/-
3. Gratuity actually received.

In case of other employees:Any other gratuity received by an employee on retirement, death, termination, resignation is exempt from tax to the extent of least of the following:

1. Rs. 3,50,000/-
2. Half month's salary for each completed year of service.
3. Gratuity actually received.

Any provision for gratuity in the books of accounts by the company for the benefit of employees is not taxable during the tenure of service of the employees.

1. Medical insurance taken by the employer for the employee or any member of the employee's familyor any reimbursement to employee of insurance premium which he has incurred is exempt.
2. Reimbursement by employer, of expenses incurred by employee on his medical treatment or that of any other member of his family in any hospital maintained by Govt. or in a hospital approved by Govt. or where payment is made by the employer directly to hospital etc. approved by the Chief Commisioner of Income Tax in connection with treatment of prescribed diseases orailments of employee or any member of his family is exempt.