Is Your Mediclaim Reimbursement Really Taxable? Let's Discuss the Tax Implications

Hi, my father was admitted to the hospital, and I paid the bills, requesting reimbursement of approximately Rs. 30,000. My company does not have any mediclaim Third Party Administrator (TPA); instead, they provide reimbursement directly from the company. However, every year, around Rs. 6,000 is deducted from each employee's total salary for mediclaim.

The company has reimbursed the required amount, but it has been added to my salary, making it taxable income. Therefore, my question is, "Is Mediclaim Reimbursement Taxable?"

Medical Reimbursement in PSUs and Private Organizations

In PSUs and some private organizations, they provide the facility to their employees for medical reimbursement with some ceiling or no ceiling based on cadre. Such reimbursements are not considered as income and, therefore, are not taxable.

In your case, it is the failure of your employer for not providing medical insurance coverage to the employees, even though they are deducting premiums from their pay. Hence, they should not include the reimbursements in the employees' income.

Pon, Chennai

These are all company policies, not as per IT rules. IT rules define a maximum of ₹15,000 for medical allowance for tax exemption subject to the production of bills. Mediclaim is totally exempted from taxation.

Pon