Can Health Drinks and Lotions Be Included in Medical Reimbursements? Seeking Your Views

When a company reimburses its employees for medical expenses incurred up to 50% of the basic salary or a maximum of Rs. 15,000, can we allow reimbursement for health drinks, cleansing lotion, anti-dandruff products, SPF spray, etc.?

Please share your views.

Regards,
Nandita

A maximum of Rs. 15,000 per year is allowable under the medical reimbursement, and it can be used only for medical purposes.

The items mentioned are not allowed. It is not a medical reimbursement but a medical allowance. Medical allowance is tax-exempt up to ₹15,000 per annum, subject to the production of bills, whereas medical reimbursements are normally borne by the employers.

Thank you, Christopher. But I need some more clarity. Can we allow reimbursement for health drinks, cleansing lotion, anti-dandruff, SPF spray, etc.? Do these come under medicines?

Regards,
Nandita

Attribution: https://www.citehr.com/483889-medica...#ixzz2sVY87UeT

Only medical items are covered; non-medical items cannot be included. Please communicate this message directly to all employees who have this benefit. Any non-medical items purchased will be subject to tax.

Thank you.

Medical means the medicine/drugs used to heal any illness. In this case, only medicine, doctor fees, and hospital fees can be covered under the medical reimbursement scheme, while the items mentioned by you are cosmetic, energy drinks, diet food, etc., which are not part of medical.

Another thing is that our friend PON commented that "Medical allowance is tax-exempted up to ₹15,000/- per annum subject to the production of bills, whereas medical reimbursements are normally borne by the employers," while medical allowance and medical reimbursement are two separate entities. Medical allowance is fully taxable, and medical reimbursement is tax-free up to ₹15,000/- per annum; beyond ₹15,000/-, it would be taxable.

Regards,
Jitender

Thank you, Jitender, that was helpful. I wanted to make sure before I reject any bills. Yes, what you say is right. Medical reimbursement is tax-free, whereas medical allowance is taxable.

Regards,
Nandita