I am new to this work environment and have certain unclear doubts regarding CTC and reimbursements. In our office portal, there is a space for medical reimbursement for which I am eligible up to 15K, which I believe is common for all (please correct me if I'm wrong). For the current year 2011-2012, I claimed medical reimbursement for 15K, but I had only submitted bills for 10K (they have approved the 10K bills), and the remaining amount of 5K in bills is yet to be submitted. Upon declaring these details in the portal, I noticed that the special allowances given to me have been reduced to nearly 7 thousand. Before declaring the medical reimbursement, my special allowance was 20K, and after declaring the medical reimbursement as 15K, the special allowance decreased to 13K. I am unsure about the reasons behind this change and would appreciate it if someone could explain this to me.
Thanks in advance!
Regards
From United States, Naperville
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Thanks in advance!
Regards
From United States, Naperville
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The best thing you can do is to go and talk to your HR or payroll department for an explanation regarding the issue. Don't forget to carry the proof of the before and after scenario. They should be able to explain it to you well.
Regards,
Sapna
From India, Ahmadabad
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2Regards,
Sapna
From India, Ahmadabad
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Understanding Allowances and Tax Benefits in India
Some companies in India provide a kitty of allowances (it's a combination of HRA, Conveyance, Medical, LTA, etc.) which employees need to decide the amount as per their expense limits.
In your case, Medical has been kept as a part of the special allowance, and hence once claimed, they have reduced the limit of the special allowance. However, as you have provided bills worth 10,000 only, you will get the tax benefit for 10,000 only, and the remaining 5,000 will be taxed in your hand.
Regards,
Pravin Nagpal
From India, Pune
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Some companies in India provide a kitty of allowances (it's a combination of HRA, Conveyance, Medical, LTA, etc.) which employees need to decide the amount as per their expense limits.
In your case, Medical has been kept as a part of the special allowance, and hence once claimed, they have reduced the limit of the special allowance. However, as you have provided bills worth 10,000 only, you will get the tax benefit for 10,000 only, and the remaining 5,000 will be taxed in your hand.
Regards,
Pravin Nagpal
From India, Pune
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Dear Shivashankarsukumar,
Kindly note that, "Under Section 17(2) of the Income-tax Act, reimbursement made by an employer of up to Rs. 15,000 of medical expenses in a year, actually incurred by an employee on his medical treatment or the treatment of any member of his family, is treated as an exempt perk."
This is the provision of Section 17(2) of the IT Act, wherein it is clearly mentioned that the expenses incurred - in this case, you will have to submit the supporting documents for the expenses incurred, such as the medical bills of you or your dependents during the particular period.
In many companies, the declaration is obtained from the employee. In some cases, the employer needs the bill copies - nothing wrong in it. As the delegation of authority is from the IT Department to the employer to verify the facts and provide the benefit.
Regards,
Ramakant.
From India, Pune
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Kindly note that, "Under Section 17(2) of the Income-tax Act, reimbursement made by an employer of up to Rs. 15,000 of medical expenses in a year, actually incurred by an employee on his medical treatment or the treatment of any member of his family, is treated as an exempt perk."
This is the provision of Section 17(2) of the IT Act, wherein it is clearly mentioned that the expenses incurred - in this case, you will have to submit the supporting documents for the expenses incurred, such as the medical bills of you or your dependents during the particular period.
In many companies, the declaration is obtained from the employee. In some cases, the employer needs the bill copies - nothing wrong in it. As the delegation of authority is from the IT Department to the employer to verify the facts and provide the benefit.
Regards,
Ramakant.
From India, Pune
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Medical Reimbursement Format.doc
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