Curious About Tax on Medical Reimbursement? Let's Discuss the Rs. 1250 Claim!

Hi all,

Please tell me the percentage of tax levied on medical reimbursement. We have a Rs. 1250 claim for all our employees.

Poonam

Dear Poonam,

Medical Allowance up to Rs. 1250 is non-taxable. Please check if you have any Allowance or Reimbursement.

Regards,
Monku

Hi Monku,

Thanks. It is a medical reimbursement, but I am unaware of the medical allowance. In which cases can medical allowance be given? I thought it is only reimbursement through which this amount is being paid to the employees. Please explain it to me.

Thanks,
Poonam

Hi Poonam,

Medical reimbursement is when you are given the amount only when you produce medical bills up to the amount of Rs 1250 per month. This may be reimbursed on a monthly/quarterly/half-yearly basis.

Medical allowance is just another component of your salary wherein you get the said amount irrespective of whether you produce the bills or not. This component is taxable, unlike the medical reimbursement, which is non-taxable if claimed through bills.

Hope this clears all doubts you have.

Gargi

Hi Gargi,

Thank you for your help. It has certainly cleared my doubt. The amount that we give is a part of the salary component, and we pay this once a year. It is taxable, and if the employee produces the bill, we pay it to him.

I also wanted to know the percentage of tax levied on it.

Cheers,
Poonam

Hi Poonam,

This is for your information that Medical Allowance, if anybody is receiving it, is taxable, whereas Medical Reimbursement is tax-free but with a limit. I believe the limit is Rs. 15,000, beyond which Medical Reimbursement also becomes taxable. After exceeding the limit of Rs. 15,000, any additional reimbursement will be added to the salary.

Regards,

RK Sinha
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