Exemption u/s 17(2)
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 September 2010
An Assessee has claimed exemption u/s 17(2)
towards reimbursements of medical expenses to the tune of Rs.13500/- from his salary
income u/s 17(2) proviso V.and offered the balance medical allowance for tax.
He has got medical allowance from the company of Rs.84000/- in addition to his salary income & other allowances u/s 17(1).
During the Scrutiny assessment in Income tax department, The ass officer has added back 13500/- as income & not allowed exemption and stated the reason for his disallowance as follows.,
An assessee cannot claim the exemption u/s 17(2) for the receipts of Medical allowance u/s 17(1)
& further states that receipts should also
be u/s 17(2) and should reflect as perquisite in form no. 12BA & hence not allowable as valid dedn.
Is he right in disallowing
the dedn claimed u/s 17(2)proviso V.
Any case law available in support of dedn claimed to submit for the Asst.
towards reimbursements of medical expenses to the tune of Rs.13500/- from his salary
income u/s 17(2) proviso V.and offered the balance medical allowance for tax.
He has got medical allowance from the company of Rs.84000/- in addition to his salary income & other allowances u/s 17(1).
During the Scrutiny assessment in Income tax department, The ass officer has added back 13500/- as income & not allowed exemption and stated the reason for his disallowance as follows.,
An assessee cannot claim the exemption u/s 17(2) for the receipts of Medical allowance u/s 17(1)
& further states that receipts should also
be u/s 17(2) and should reflect as perquisite in form no. 12BA & hence not allowable as valid dedn.
Is he right in disallowing
the dedn claimed u/s 17(2)proviso V.
Any case law available in support of dedn claimed to submit for the Asst.
08 September 2010
There is a difference between the Medical Allowance and Medical Reimbursement. Medical Allowance is fixed and part of salary and there is no deduction under the IT act , it is taxable. As a tax planning device, the Employer should not club the Medical Amt. in the pay slip. Instead, it should take the Medical Bills from the employees and make the reimbursement against the bills.
From your querry it appears that , the employee was getting the Medical Allowance and was forming part of salary, then the action of the AO is correct
From your querry it appears that , the employee was getting the Medical Allowance and was forming part of salary, then the action of the AO is correct
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- Fixe term employment
- Is any professional CA is here please reply
- GST ITC REVERSE
- Putting a heading on received mail
- TDS on TRUST
- RCM ISSUE ON RENT AND TRANSPORTATION CHARGES
- Consolidated financials
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Reprocessing of rectification order AY 2025-26
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
