Medical Allowances With Respect To Tax Calculations

Medical Allowances is tax free till 15000/- p.a. Above which it becomes taxable.
What about medical reimbursements given.Is there a limit for that too.what are the general rule for reimbursing medical benefits.
Regards
Joan

if you are following CTC ( cost to company ) basis then there is nothing else to pay, thus rendering the need to calculate reimbursments useless.
Please Note to use the Medical allowance you will have to submit actual bills for reimbursements. these reimbursements are subject to a maximum of Rs:15,000 for tax saving purposes.
SO if you reproduce on demand bills worth Rs1000/- only then your Medical reimbursement will be for Rs1000 only.
hope this info helped you understand it better.

So does it mean that medical allowances and medical reimbursements are one and the same or for that matter, similar?

The allowance could be Rs:15,000
if you claim full (or more ) by showing cash receipts of the same then the value of reimbursements is subject to a maximum of Rs:15,000 only not more, but less if value of bills shown is less.
Allowance = maximum limit
reimbursements = what is claimed actually by showing proof via bills.
hope this clears the concept.
feel free to ask more :p) :twisted:

Dear Joan

Medical allowance is taxable. Under the income tax any amount paid as allowance is considered as a part of salary and hence it becomes taxable irrespective whether it is 15000.00 or less or more.

Medical reimbursement upto of Rs.15000.00 per year made by an employer to employee are exempted from payment of income tax. For this employee has to claim this reimbursement.

For claiming reimbursement of expenses, every employee is required to give undertaking or to submit bills to support the claim.

These expenses may be in shape of doctor's consultation fee, purchase of medicines or payment of fee / charges towards pathological test. The expenses can be on him / her self or other dependents of the family including father, mother, or dependent brother sister.

To claim reimbursement employee must keep the support with him / her even though the same has not been asked for by the employer. Onus to prove is with the employee only because h/she is availing tax benefits from income tax authorities against these reimbursement.

Hence again reimbursement and allowance are not the same things. Reimbursement is a receipt against the expenses already paid by an individual and allowance is an amount which is directly a part of monthly salary.

Regards

Anil Anand

Just wanted to check whether medical expenses on Opticals, Dentals and ortho allowed under medical reimbursement
Vineet

Dear Vineet
Expenses incurred by an employee for the purchase of Spectacles to correct the vision to an extent defeats the purposes of medical reimbursement. Yes the Charges paid to doctor (Opthalomogist) for medically evaluating your present eye vision and advise for use of correct power of lenses , is reimbursable and is also exempt from incometax.
Making reimbursement is discretion and depends upon the policy of the management , any company is free to reimburse any expenses. But for claiming exemption from Income Tax the expenses must meet the objective of the act.
Expenses incurred for availing ortho or dental services are fully reimbursable as per policy of the company and are also exempt from Income Tax upto the limit of Rs.15000.00 against medical procedures / treatment during the year.
Regards
Anil Anand

So is it a common practice for employers to pay their employees that don't use the company's health plan. It seems to me that all or part of what an employer would spend on insurance should be given to the employee. The employee shouldn't necessarily lose the benefit just because a spouse has a better insurance or something like that.

Hi Anil,
I recently joined CiteHr. Was reading the conversation regarding Medical Allowance and Medical Reimbursement.
Got my concepts clear now about it. My company wants to introduce Medical Reimbursement as a part of the CTC.\, I need to prepare documentation to introduce it to the company.
Could you help me out incase you have any write up on the same
Margaret. :)

Dear All,
Major difference between medical allowance and medical reimbursement as follows:-
Medical Allowance:
1. Its part of the individual salary.
2. It becomes non-taxable on production of actual bills upto a maximum of Rs.15000.
3. If you are not avaialbel to produce actual bills then company actually pays you medical allowance but it becomes taxable.
Medical Reimbursement:
1.Available only on production of actual bills.
2.Company not liable to pay if the bills are not produced.
Sumit