Is Conveyance Allowance and Medical Reimbursement Paid Pro-Rata for Partial Months?

Is medical reimbursement and conveyance allowance paid on a pro-rata basis? For example, if an employee joins on 20-Jan-14, is he eligible for the full amount of ₹800 conveyance allowance and ₹1250 medical reimbursement, or should that be calculated and paid based on the number of days worked?

Thank you.

Salary Components Paid on a Pro Rata Basis

All components of salary are paid on a pro rata basis only.

Regards

Difference Between Medical Reimbursement and Medical Allowance

There is a difference between medical reimbursement and medical allowance. The limit of ₹1250 per month is for medical allowance, and it may be a part of the gross salary/CTC. To avail of tax exemption, one has to produce the bills; otherwise, it will be taxable.

On the other hand, some companies/PSUs follow the practice of medical reimbursement, which can be claimed only after the production of bills. The limit of the claim is prescribed cadre-wise. There may be two types of reimbursements: domiciliary and hospitalization. Now, most companies are covering their employees under mediclaim policies for hospitalization expenses.

Regards,
Pon, Chennai

PON is right. If conveyance allowance and medical reimbursement are paid regularly every month as part of the salary, they can be paid on a pro-rata basis. If they are paid to reimburse actual expenses incurred based on the bills, they cannot be paid on a pro-rata basis.

Regards,
B. Saikumar
Navi Mumbai

Hi, I am new here. Please forgive me if any mistakes are made by me. Could anybody please explain to me what is pro-rata basis?

Regards,
Bhavan Michal

Feel free to seek clarifications in this forum; there is no need to feel sorry for seeking an explanation on a matter.

"Understanding Pro Rata Basis"

"Pro rata basis" means that if an employee earns, say, Rs. 3000 as an allowance for the whole month and if the employee has joined on the 20th of January 2014, with January 2014 having 31 days. To compute pro rata eligibility, you have to calculate as follows:

Rs. 3000 / 31 days = Rs. 96.77 per day x 12 days (31 days - 19 days as he is eligible for the allowance for 12 days, with the date of joining being the 20th of January 2014) = Rs. 1161.

Hence, for January 2014, he will be eligible for Rs. 1161. The same methodology needs to be followed by you for calculating Loss of Pay as well.

Trust the matter is clarified.

Regards

If a person has a Loss of Pay (LOP) of 2 days, should we deduct LOP from Conveyance and Medical Allowance, as they have standard values of Rs. 800/- and Rs. 1250/- respectively? Also, please clarify whether any clauses have been provided by the Income Tax Department regarding this.

Regards,
Gajendra