Practicing Chartered Accountant
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Thread Started by #jusmas

My salary structure contain Rs. 1250 /Month under' Medical Allowance'. That amount was paid with my monthly salary and Tax is deducted on that also as TDS. Now, at the end of the financial year, I have medical bills of Rs 15000. On submitting the IT Return, can I deduct this Rs 15000 under any head?
One accountant told me that it had to be processed with the company and no tax benefit is available as it was mentioned 'medical Allowance' in pay slips. Please advise.
7th August 2013 From India, Ernakulam
If any deduction under medical allowance made from your salary than it is comes on tax benifit but if it was paid with your salary than it is just a Salary head to divide your salary like basic, HRA, Transportation Allowance, Education Allowance, LTA, Medical Allowance etc.
7th August 2013 From India, Jaipur
As per my knowledge salary head Medical Allowance not giving any tax benefits
Medical reimbursement head can give you tax relaxations, if your employer giving relaxations on medical allow. term than it might be wrong practice by employer .
Tell your employer to use Medical or Medical reimbursement term.
Seniors please advice.
Thanking you,
7th August 2013 From India, Pune
Hi All, My question is that for the fin year, the employer paid me Rs 15000 under Medical allowances (just part of salary) and deducted TDS on it. And, now I have medical bills for Rs 15000 on hand, for which I can claim tax benefit and a refund, direct to the income tax department by deducting it from the taxable income in the IT return?
7th August 2013 From India, Ernakulam
It is not possible now to claim tax benefit, as your TDS has already been deducted and the Form 16 must have been issued to you wherein they must have shown the Taxable Income from Salary, you cannot change the Taxable Income certified by your employer.
7th August 2013 From India, Ahmadabad
Saji says taxable income certified by the employer cannot be changed. If I have other income then I can declare it in the IT return, in the same way can’t I request for a refund? Thanks, JT
7th August 2013 From India, Ernakulam
Hello Jusmas,
I have just talked with my CA, he told me that we can file the pending amount whether you had claim through Employer or not,
Please consult with consultant.
At time of Refund money, IT Officer may ask you for proof of Medical Reimbursement.
Thanking you,
7th August 2013 From India, Pune
It is not Medical Reimbursement, it is Medical Allowance which the employer must have taken in the Head called Income from Salary. So accordingly the employer has deducted the TDS, Please do keep in mind that it is the duty of the employer to deduct tax with regards to salary
7th August 2013 From India, Ahmadabad
Saji, Yes, I admit that employer has just deducted the tax from Medical allowance, nothing wrong in it. My attempt is to know any possibility to claim the tax excemption directly to IT dept, on the same medical allowance , which i didnt get from the employer.
Because some people told me that I cant; only possibility was that if it was 'Medical Reimbursement' in payslips, but it is 'Medical Allowance' actually.
But from the responses I am getting here, I think I can still claim the Rs 15000 for tax exemption from the total taxable income indicated in the form16 by the employer.
Am I right?
7th August 2013 From India, Ernakulam
I don't think so, but since few senior members has advised that you can claim so, it is obvious that they must have much experience, so go ahead with your claim and do let us know to update ourselves
8th August 2013 From India, Ahmadabad
You can claim it. Name does not matter since the intention of allowance is to reimberse. However the claim should be only of amount you have bills for.
8th August 2013 From India, Bangalore
You can’t claim deduction of medical allowance, however if it was medical reimbursement , it may be claimed.
8th August 2013 From India, Lucknow
You can not claim the amount now.
You would have got a tax benefit if you had submitted the bills to the employer in time and they would have taken the amount paid to you as reimbursement and not allowance.
As per the current provisions of law, you can not claim refund of tax deducted as the amount is actually medical allowance because you did not submit the bills on time.
This should be a lesson for you that you should submit the bills in time to the employer.
I hope this clarifies your doubts on the matter.
9th August 2013 From India, New Delhi
Thanks guys.. My situation is that I worked in a company during Apr-Sep and in Sep the company shut down its operations. I have been working for one of their clients, and even after Sep, I continued. The salary used to come from the client and the closed company was paying to me. There was no accountant / HR in the company after Sep. to take care of these things and that is the reason I could not submit the medical bills. At the end, we didn't receive the form16 even after 8 months after the company shut down..
9th August 2013 From India, Ernakulam
Dear All,
Medical Allowance is fully taxable as per the Income Tax Act. If fixed allowance amount of allowance is paid as part of your salary monthly irrespective of your spending on medical exp then ALLOWANCE IS FULLY TAXABLE unless it is exempted under section 10 of the IT ACT,1961.
Medical reimbursement is paid when employee incurred some expenses out of his pocket and same is claimed from the employer.In this case an amount of Rs.15000 is exempted.
Ex.If you incurred Rs.20000 ans same is reimbursement by the Employer then Rs.5000 (20000 -15000) is taxable while computing Taxable Income under Income Tax Act,1961
I hope this will help you .If you have any query pls mail at mdabdulrashid AT
Awaiting for your comments.
7th August 2014 From India, Hyderabad
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