Medical Reimbursement Dilemma: How Should We Handle Missing Employee Bills?

We provide medical reimbursement to our employees on a quarterly basis, but they're not always able to provide the requisite medical bill. What should be done in this scenario?

Can they also produce the bill of their immediate family members like father, mother, wife, kids, and/or any other relative? Should we ask them to produce the bill on an annual basis (of Rs 12,000 or Rs 15,000) if they can't produce the bill quarterly? Or can we also give them the payment without the production of medical bills? For your information, this medical amount is part of their salary. Please suggest as soon as possible. Thanks in advance.

Option 2 is acceptable. If they fail to produce the bills at the end of December up to Rs. 15,000, the amount may be treated as taxable. The medical bills of dependents are permissible for tax exemption.

Hi,

1) The employees can cover the medical expenses of dependents like mother, father, and dependent siblings. We follow this policy.

2) The bills can be produced annually before 31st March. The only trouble is collecting the bills of such a huge amount. Hence, a quarterly system is helpful. If you pay the medical amount without bills, that amount becomes taxable.

Regards,
Trupti.