Medical Reimbursements

If we are making Medical Reimbursement as part of salary break-up and at the end of the year out of Rs. 15000 only Rs.10,000 bills are received. Then how to manage the tax at the end of the year ?

Hi,
Then u need to tax the Balance Rs. 5000 in our example.
Rgds,
Vikas

bal 5000 is a taxable income.--------------------
pon

Hi,
The way to treat this is to add Rs 15,000/= (since it a part of the CTC) to the Gross Income. Thereafter allow a deduction (under Section 80D) for the amount of bills submitted (up to a maximum of Rs 15,000/=).
In this manner, in the example cited by you wherein bills for Rs 10,000/= are submitted, the residual amount of Rs 5,000/= will be included as taxable income and get taxed accordingly.
Regards
Raju Bhatnagar

I have a doubt, let me know, whether you actually paid him Rs.15,000/-(for the entire year) even before the bills were produced or is't that he produced bills only for Rs.10,000/- and was reimbursed only upto 10,000 ? My hunch is that his CTC include a component "medical exp.reimbursed to the extent of Rs.15,000/- and he so far didn't produce bills for the balance of Rs.5000. On this premise if you have not reimbursed or paid him 15000 there is no need to tax him for the unpaid 5000. In other words 'No payment No tax', which one is correct ? Even if you paid him fully Rs.15000 as a part of salary and against which he only produced Rs.10000 then exemption is not available for balance of 5000 which any how remains part of salary in which case you need not add back separately as an additional income and taxable income, IT computed accordingly.

Hi,
Its included in th salary package and IT act has given exemption to the extent of Rs. 15000. If bills are not produced then the entire amount will be taxable.
Rgds,
Vikas Goel