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Exemption of Medical Allowance

Subhash Saluja (Accountant) (40 Points)

19 May 2010

My employer is paying fixed medical allowance every month in my pay slip. Still can I claim a rebate of Rs.15,000/- per year towards reimbursement of medical expenses, even if submit medical bills to my employer to the extent of Rs.15,000/-. Please Advise.

Regards,

S C Saluja

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11 Replies

(Guest)

hai....

medical allowance and reimbursements are different

Medical allowance is FULLY taxable

Medical Reimbursement is exempt upto Rs 15000

These are parallel provisions and not mutually exclusive....

1 Like

Neha (Article) (118 Points)
Replied 19 May 2010

dear saluja ji....

fixed medical allowance is alwayz fully taxable..

there's no exemption available against it...

so , in ur case i think no exemption is available... if i get to know anything else about it..., i vl definitely tell u....

Regards..

Neha

1 Like

DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 19 May 2010

agree with the above friends.allowances other than hra and some specified allowances are always fully taxable.

DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 19 May 2010

allowance other than hra and under section 10(14) are always fully taxable.

regards

tarun rustagi

C.Balaji (Learner) (1867 Points)
Replied 19 May 2010

Agree with above friends........

Medical Allowance is fully taxable......

Medical reimbursement for treatment taken in a pvt. hospital is exempt upto Rs.15000/-.

Incase of Govt. hospital and some other hosp. it is fully exempt.....

CA Punit GoSwaMi (Chartered Accountant) (310 Points)
Replied 19 May 2010

Fixed medical allowance is alwz taxable..

Ankit rastogi (c.a student) (103 Points)
Replied 20 May 2010

I agree with above friends.but if you have taken a medical policy in this case exemption is allowed to the extent of 15000 as per sec 80D.but medical allowances are fully taxable.

Shudhanshu Agrawal (Business) (2570 Points)
Replied 20 May 2010

i am agree with all my friends as this is in the books.

Here i want to talk something practically. When FBT was introdced with Finance Act, 2005 many companies started doing tax planning for their employees. In that they use to provide reimbursement to save employees from tax burden, medical reimbursement became the part of this tax planning.

In this they use to give fixed amount of Rs. 1250 pm as part of salary and deducte FBT paid by them. Here also i think the case is similar. They are giving Rs. 15000 in 12 monthly installments. According to me this is correct, if employee furnish the medical bills.

I have not touched medical allowances as they are taxable

Do correct me if im wrong.

nitin (executive) (35 Points)
Replied 15 July 2010

fully taxable except if name is changed by employer.

Milind (Finance Officer) (21 Points)
Replied 14 July 2013

Hi,

Which medical bills are not cover under exemption?

Siddharth Goel (Chartered Accountant) (3026 Points)
Replied 03 July 2018

Hi,

Most of the employees get confused between medical allowance part of the salary structure & medical reimbursement which they receive from employer after submitting their original medical bills.

Medical allowance is a fixed component that you receive every month as part of your monthly salary, that is taxable as salary income. No bills are required to be submitted for taking this allowance.

Whereas Medical reimbursement is a tax-free component and as discussed above, it is exempted up to the amount spent by employee or Rs.15,000 whichever is less.

As per an amendment in the Budget 2018, tax exemption on medical reimbursement amounting to INR 15,000 and transport allowance amounting to INR 19,200 in a financial year have been replaced with a standard deduction of INR 40,000. This amendment will be applicable starting FY 2018-19 (i.e. starting 1st April 2018).

There is no specific set of medical bills mentioned but this can be considered:

Medical bills incurred for self, spouse and children can be submitted for reimbursement. Medical bills of parents and siblings who are wholly dependent on the employee can also be claimed as reimbursement.

These bills could be for the purchase of medicines from pharmacies and medical shops, or medical treatment taken at public or private hospitals and clinics.