Understanding Medical Allowance: Do I Need Bills for Tax Exemption and Monthly Payments?

Hi friends,

I would like to know the following:
Medical Allowance of Rs. 1250/- per month is exempted from tax. Is any medical bill to be given for this Rs. 1250/-? Or can it just be included and paid with the salary?

15 days' basic salary is given as medical reimbursement. Whether this money can be given once a year or it can be given along with the salary every month, i.e., dividing the 15 days' basic salary into 12 months. Kindly clarify for me.

My email Id: s_mary10@rediffmail.com

Regards,
Mary

Hi Mary,

Yes, it's true that Medical Allowance of Rs. 1250 is exempted from the tax, and yes, a medical bill is required for the same. Regarding medical reimbursement, mostly it is given once a year.

Regards,
Amit Seth

The payment cycle depends on company policies and varies from company to company. Most companies reimburse this amount every quarter. However, there are companies that pay it on an as-needed basis. That is, a person can claim this upon production of receipts at any time subject to a maximum reimbursement of Rs. 15,000 in a year.

Hi Mary,

The medical allowance of Rs. 1250/- per month, i.e., Rs. 15,000/- annually, is exempt from tax provided the employee has to produce the medical bills for the expenses incurred on him/her or his/her family as per the IT rules. Please get the medical declaration form along with the medical bills.

Regards,
Sushil

All medical reimbursements need to be supported with actual bills for claims. Any unclaimed amount during the year would be subject to tax.

Thanks,
Anand R