Dinesh Divekar
Business Mentor, Consultant And Trainer
Learning & Teaching Fellow (retired)
Finance, Hr, Sectarial Practices, Law And
Hr & Back End Operations
Vidyesh Kul
Software Consultant, Lms Expert
+3 Others

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hii all, i want to know what can be the liability on the company if its employees are submitting fake medical bills, for quarterly medical expenses reimbursement. Regards, Nidhi
Dear Nidhi,
Ascertain the veracity of the medical bills. If it is proved that the bills were forged then conduct the enquiry and give chance to the defaulter to prove his/her innocence. If the enquiry officer finds the accused guilty, you can take the disciplinary action. It can be termination of the services also.
It may be reminded that erstwhile Satyam computers found few of their staffs had fudged the transport claims. They had conducted enquiries and had terminated 3,000 staffs!
However, make sure not to take disciplinary action without proper enquiry.

Thanks DInesh,
Can u please Clarify wat laibility the company has from AUdit Angle. i.e IT AUdit or tAx Audit.
In our org , ppl are getting decent basic salary ranging for 25000-60000, so their medical reimbursement @7 % of basic, goes up to 21000 to 50000 . wat if the company pays Rs 15000 as medicla reimbursement & pay rest as a part of salary(mmedical allowance).
i hope then the company can be benefitted form any liability.
also imp point note to forget is that all emloyees get original mnedical bills at at cost.
am i right??
please revert.
Thanks in advance

Tansport bills if fake can be checked into by making it compulsory to give 3 different quotations from 3 different transporters and then finalzing on the feaseable one.

Regarding Medical Bills, if its a genuine Medical Store Bill (of course bill number, doctor name, CST, VAT Details etc.), then I think one should not dwell deep into it. Just Pay out the re-imbursement afterall these costs are included in the CTC. The logic used is that if an employee visits a doctor or specialist for treatment then the company doesnt pay for it ...so what is the harm if it reimbuses genuine bills as per norms no matter how the employee has got it. The onus of issuing such bills lies on the medical store afterall. HR doesnt need to be a CBI in everything I guess. There are people higher up the ladder in Management who litterally flout the rules for huge sums (petrol bills, mobile, clothing etc.) wherein nobody questions. It would lead to Penny wise and Pound foolish kind of scenario. If you start pinching mid-level employees everywhere, you will create the road towards your own downfall. Look at what has happened to Satyam!!!!!!!!

Obviously this is just my thoughts which i implement and maybe someone else might differ on this.

I personally feel the best option would be that your company fixes a certain amount towards medical expenses and the same should be paid at the beginning of each financial year. This was the employees would be happy and the problem of submitting fake medical bills would also be sorted out. It is a well known fact that there are doctors who are associated with medical colleges and because of certain government restrictions are not ready to give bills for consultation etc. Also you would be saving on the cost of a person assigned with the duties of checking the bills and keeping the records. Believe me I am from a company where they made this transition and it has proved to be a big success.
It is always better to pay a fixed medical allowance to employees every month or on annual basis, against the certificate that he has actually incurred sum on medical treatment on himself or on his family members. This covers the IT deduction too. Employee would be happy and the employer is worry free.
Dear Nidhi,
It appears from your following statement that you are not worried about people making false claims, but worried about how to regularise paying upto 50000 in medical allowances.
"..wat if the company pays Rs 15000 as medicla reimbursement & pay rest as a part of salary(mmedical allowance)..."
Am I right? If so, you should be asking Madhu T K an expert on law.
Have a nice day.
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I think this tax system should replaced by one time tax on total take home incomefor salaried persons. Then submission of proof will not be require. tax deduction may be 10% - 20% of total take home income for salaried persons and other sale tax, service tax, vat, etc.. should be non applicable.
Dear Nidhi,
The medical reimbursement component in CTC is to avail exemption from income tax.
As the employee is providing forged bills, these bills can be treated as null and void for exemptions.
The employee will be paid medical reimbursement as stated in his/her CTC so you are paying the employee as commited. However the amount of forged bill will be treated as taxable amount.
e.g. For an employee quarterly medical reimbursement is Rs. 6000/-, and submits fake bills worth of Rs. 2000/-. These Rs. 2000/- is to be considered taxable.
Although this method will not eliminate your scrutiny work, but worth giving a thought.

What do you intend to convey by the words, "PDF DOWNLOAD" as added along with the words "Fake Medical Bills"?
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