Medical Reimbursement Carried Forward To Next Year - CiteHR
Ukmitra
Business Development, Employee Relations,
Pon1965
Construction
+1 Other

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Hi All,
Our employer carries forward two components of CTC to next year
1. Medical Reimbursement
2. LTA
This is done for want of bills from employees. If no bills / insufficient bills are submitted by the employee the balance to the credit of the employee at the year end is not paid to the employee but is carried forward to next year. In next year too the employee has to submit such bills for claiming any cumulative balance standing to his credit. In the absence of bills such amounts are accumulated in the name of employee year on year and paid at the time when he leaves his job.
Employer argue that the same cannot be credited to the employee at every financial year end as the employee has not submitted the bills.
My query is
1) Whether it is right to carryforward such amounts to next year.
2) Why cant an employee get his sum due to him at year end after deducting requisite taxes.
Please clarify with supportings (Income tax circulars/ case laws etc)

Dear Anand,
Your Employer is Correct. You need to close the books of account every year.
I understand your genuine act of goodness to give the benefit to employees. But you also need to understand that taxing system in India. I am sure Tax consultant and CA will suffice your hunger for understanding the taxing system in indian, which is so much taxing to us. .
Ukmitra

Unavailed medical allowance can not be carried forward and paid as taxable if one fails to produce the bills. The limit for tax exemption is 15000/- p.a. Pon
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