Hi Dev,
My company pays 4% of the basic salary as Medical Allowances. Now, if an employee spends more than this amount on actual medical expenses, can that amount be deducted from his taxable income? He will be able to produce medical bills, and I also understand the limit is Rs. 15,000.
Dev
From India, Ahmadabad
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1My company pays 4% of the basic salary as Medical Allowances. Now, if an employee spends more than this amount on actual medical expenses, can that amount be deducted from his taxable income? He will be able to produce medical bills, and I also understand the limit is Rs. 15,000.
Dev
From India, Ahmadabad
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Hi,
An amount of Rs. 1250 per month or Rs. 15,000 per annum is exempt from income tax, which can be paid as a medical allowance to the employee. The employee needs to submit medical bills once in a quarter, half-yearly, or yearly and claim the reimbursement. Any amount paid or claimed beyond Rs. 15,000 in a financial year would become taxable.
Thanks,
Shrini
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An amount of Rs. 1250 per month or Rs. 15,000 per annum is exempt from income tax, which can be paid as a medical allowance to the employee. The employee needs to submit medical bills once in a quarter, half-yearly, or yearly and claim the reimbursement. Any amount paid or claimed beyond Rs. 15,000 in a financial year would become taxable.
Thanks,
Shrini
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Thanks, Vipin and Shrini.
I am still not clear on one thing. I'll try to give you figures. Say, for example, the company pays only 5000 as a medical allowance, whereas the employee spends about 15000 on medical bills from his pocket. So, will he get the rebate on Rs. 5000 only, or can he get it for Rs. 15000 by producing bills?
Dev
From India, Ahmadabad
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I am still not clear on one thing. I'll try to give you figures. Say, for example, the company pays only 5000 as a medical allowance, whereas the employee spends about 15000 on medical bills from his pocket. So, will he get the rebate on Rs. 5000 only, or can he get it for Rs. 15000 by producing bills?
Dev
From India, Ahmadabad
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If, as per the policy of the company, for a particular Band/Grade, the medical allowance is fixed at Rs. 5000, then the company would provide tax benefits up to Rs. 5000, even if the employee has spent more than this.
Hope this is clear.
Regards,
Shrini
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Hope this is clear.
Regards,
Shrini
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Hi Dev,
As per the IT Act, if you term it as medical 'allowance' (which is paid to the employee irrespective of the actual expense), it is taxable even if the employee produces the bills.
But, if you term it as medical 'reimbursement' (which is paid to the employee depending upon the actual expense), then up to Rs. 15,000 per annum is exempt from tax, on producing the bills.
Hope this helps!
Regards,
Deepthi
From India, Hyderabad
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As per the IT Act, if you term it as medical 'allowance' (which is paid to the employee irrespective of the actual expense), it is taxable even if the employee produces the bills.
But, if you term it as medical 'reimbursement' (which is paid to the employee depending upon the actual expense), then up to Rs. 15,000 per annum is exempt from tax, on producing the bills.
Hope this helps!
Regards,
Deepthi
From India, Hyderabad
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Hi Guys, Can an employee who paid Rs.15,000/- toward medical expenses in a year claim tax benefit when his salary break up shows 72,000/- as medical allowance. If so, how? Thank You ansari
From India, Visakhapatnam
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From India, Visakhapatnam
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