Medical Reimbursement Confusion: How Do You Figure Out Taxable vs. Non-Taxable Amounts?

Hi,

How do you calculate medical reimbursement and distinguish between taxable and non-taxable amounts? Can you please provide detailed examples?

Thank you.

Dear Ashok,

It depends on the company policy. The actual medical reimbursement for tax exemption is Rs. 1250.00 per month. So, if the medical allowance is more than Rs. 1250.00, the person will get an exemption on Rs. 1250.00. Reimbursement means that for claiming the allowance, one should produce the bills for the same. If a person does not provide the medical bills and still takes the allowance, then the entire amount would be taxable.

Thanks,
Amit Shah

Dear Ashok,

It is very true as defined by Mr. Amit. It's rupees 1250/- per month of medical reimbursement, which is exempted under the tax rules.

Amit Seth.

Let's start by using the right nomenclature with reference to the medical component of your salary.

It should be termed Medical Reimbursement, not Medical Allowance. This is because an allowance per se is taxable in all cases, except those specifically exempted.

For general medical reimbursement, Rs 15,000 is the maximum tax break that an individual can avail of against actual supporting documents.

Let's say that, based on your company rules, you are eligible for medical reimbursement of a month's basic salary. Let's further assume that this is Rs 30,000.

So, the amount you are eligible for reimbursement is Rs 30,000.

Now there are two aspects to this situation: you need to submit at least Rs 30,000 worth of medical bills to claim the eligible reimbursement from your employer.

Second, the tax break would only be available for Rs 15,000, though you have provided bills for Rs 30,000.

Note:

If an employee receives some money for his medical treatment or the treatment of any member of his family or any of his dependent relatives, then a sum up to Rs. 15,000 p.a. is not treated as a taxable perquisite as per Clause (b) of the provision to Section 17(2) of the I.TA. Act. This exemption is enjoyed by the employee only if the expenditure is actually incurred on his medical treatment or for the treatment of any member of the family or a dependent relative. It may be noted here that there is no condition that the medical treatment should be at any of the approved hospitals. It could be at any place and from any type of doctor belonging to Allopathic, Ayurvedic, Unani, or Naturopathy system of medicine. If a medical allowance is received, then it would be fully taxable.

In the income tax act, nowhere is mentioned the Monthly Limit.

Medical reimbursement is provided on a declaration basis. For example, if you declare 15000/- in a year and claim 10000/- reimbursement through medical bills, the balance amount (15000-10000=5000) will be given to you with your March salary, and this amount will be taxable.

In short, the amount you receive with your salary for medical expenses will be taxable, while the amount you receive through reimbursement up to 15000/- is non-taxable.

Is there any tax deduction in the Medical Reimbursement claim amount? In my company, tax was deducted from my Medical Reimbursement claim amount. Can anyone help me out?

Whether dental treatment bills are eligible for claiming exemption of medical reimbursement?

Whether dental treatment bills are eligible for claiming exemption of medical reimbursement?

Medical reimbursement should be given in the month of March salary or is it based on the company's policy? If the company decides to give medical reimbursement in the month of December, then it's okay? Please help me in this regard.

Roshan.

Hi, anybody have TDS/TCS monthly challan (Excel format)? If you have this, please share it.

TAMIL...

Hi Friends,

If I claim Medical Reimbursement, I have to produce medical bills for that, right? Please tell me, in whose names these bills can be; i.e. mine, my wife's, or my parents'? I recently submitted bills in the names of my father, mother, and myself, but the accounts manager rejected that claim, stating that I can only submit bills in my name. Is this logical?

In the mediclaim policy, they have included the names of all my family members (father, mother, and wife). Can you provide your valuable suggestions?

Best Regards.

Hi, I was on leave for 2 months due to jaundice (LOP). Now, the company has changed my mediclaim eligibility from 15,000 to 9,462 Rs. Is this legal? Can you cite any IT Act for the same?

Thanks,
Ankit

Hi,

Our payroll is outsourced, so we have to submit medical bills to our payroll vendor. My employee raised a question, "Is it compulsory to submit the original medical bills because my medical bills are above Rs. 25,000, with an exemption of Rs. 15,000? I have mediclaim insurance which I personally pay, and I have to submit the bills to the insurance company so that I can reimburse the remaining Rs. 10,000.

Please help.

Regards

Sorry Amit, but as per my knowledge, medical reimbursement up to Rs. 15,000 per annum is exempt from income tax.
Please clarify for me which one is true.

Archana