FBT on medical allowance

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Pawan Jaju (Querist)
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04 March 2009 The company is paying medical allowance and calculates FBT on Rs. 15,000 which is exempt in the hands of the employee but for those employees whose income is not liable under income tax act the company does not calculate FBT on the medical allowance paid to such employee. Is it correct?
Also, the medical allowance paid to such employee is dr to salary in the account but shown as medical allowance in the salary sheet, will it make any difference?

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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04 March 2009 Medical allowance given to emplyees is fully taxable in their hands.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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04 March 2009 However, reimbursement of medical expenditure up to Rs. 15,000.00 is exempt in hands of employees.

On the same side, medical expenditure reimbursement up to Rs. 15,000.00 come under FBT.

There is no difference that employees salary is taxable or not for the calculatiopn on FBT. FBT is applicable on all the reinmursement of medical expenditure up to Rs. 15000.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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04 March 2009 If this is shown as medical allowance in the salary sheet then it will be fully taxable in the hands of employees.

And this is shown as reimbursement then it is exempt up to Rs. 15000.

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