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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 February 2013 Dear Sir Please suggest if a company paid Rs.15000/- as medical allowance and employee submitted the bills of medical and after that he does a medical policy which annual premium of Rs.10000/-.

Please suggest in this case how much amount is relief able under 80D?

Please also suggest that 15000/- is non-taxable income or taxable income

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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25 February 2013 80D covers medical insurance premium and Rs.10000 will be allowed as deduction u/s 80D.

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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25 February 2013 Fixed Medical allowance is fully taxable in hands of employee

@VaibhavJ

@VaibhavJ (Expert)
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25 February 2013 Hi

If any bills is submitted against medical allowance then same is exempt.

Thanks!!

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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25 February 2013 @ Vaibhav J

There is no exemption against Medical Allowance.

If reimbursement against medical bills exceeds 15,000/- the same would be taxed as perquisite.

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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25 February 2013 Refer rule 2BB regarding allowances which are exempt.

https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2002ITAct/rules2002/mg004.htm

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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25 February 2013 Since, both the Medical Allowance and Medical Reimbursement forms part of salary but Medical Allowance is just an allowance and is fully taxable whereas Medical Reimbursement is a perquisite and is exempt to a certain limit.i.e 15000/-.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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25 February 2013 Dear Suraj,

But, The Practical Aspect is:-

Generally Companies Give Them Allowances Showing "Medical" Only, and At End of year Employee Shows The Bills Then The Medical allowances (Upto 15k) not Considered to be part of salary.and Employee Claim Those allwances as Medical reimbursement.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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25 February 2013 Dear Author,

You Can Claim Medical reimbursement of rs. 15000/- (Non Taxable)
+
Mediclaim Policy of 10000/-.u/s 80D.

Regards,
CA Ayush Agrawal

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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25 February 2013 Many employers design their salary structure in such a way that employees can choose the "head" within the overall limit. If an employee chooses Medical reimbursement, than on presentment of bills, the employer reimburses the medical expenditure. If an employee is unable to submit bills, the same is taken as other allowances and taxed.

This is how it is structured.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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25 February 2013 Yes, Same Thing You have Written Which I Already Discussed in My second Comment.

I have Never Seen any One Who Can provide Medical Bill to Employer and Not Claiming Medical Reimbursement(15000/-)

@VaibhavJ

@VaibhavJ (Expert)
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25 February 2013 Hi Suraj,

Upto 15000 it is exempt which is in line with the amount mentioned by author.

Thanks for links.

Cheerz!!

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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25 February 2013 So it is always prudent to name it as a medical reimbursement rather than an allowance. The person seeking reply must be clear about the difference that allowance is not the same thing as reimbursement.

@VaibhavJ

@VaibhavJ (Expert)
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25 February 2013 Hi

Agree with your intention Surajji.

However, even if you name it as medical reimbursement & if bills not submitted then it is taxable & if it is named as medical allowance & if bills are produced in support of expenses made then same can not be held taxable.

Thanks!!

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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25 February 2013 Yes, I Have Already Written My Third Comment for Author Only.

Thanks to All for Your valuable Comments.

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