Medial Re-imbursement over Rs. 15,000

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Amit Bhatkar (Querist)
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14 March 2008 Hello All members of CAClubIndia,

The question is on taxability of medical re-imbursement claims in the hands of Employee.

If employee claims the medical re-imbursement over and above of Rs. 15,000, say 16,000 in a particular financial year ,what will be the correct amount liable to Income Tax for Employee ?

Is it the whole amount claimed i.e. Rs. 16,000 or only the excess amount of Rs. 1000 ?

Beacuse I read different views. One is saying only Rs. 1000 and other saying whole Rs. 16,000 will get taxable in the hands of employee.

I have deducted the TDS for one of our employee by taxing the whole claim of Rs. 16,000. If it is wrong how shall I rectify it before the close of this F.Y. ?

Please Advise.......

Thanks and Best Regards,
Amit

jegannath G

jegannath G (Expert)
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14 March 2008 its wrong. He can claim the basic exemption of Rs 15000

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)
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15 March 2008 THE BASIC EXEMPTION LIMIT IS 15000/-,THEREFORE IN EXCESS OF 15000/- SHALL BE TAXABLE

Amit Bhatkar

Amit Bhatkar (Querist)
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15 March 2008 Dear Experts,
Thanks for your valuable comments.
Now how can I rectify this excess deduction of TDS ?
Is there any alternate way to pay back the excess deduction to employee ?

What about the first 15,000.. Is it liable to FBT ?

Thanks
Amit

In my opinion only alternate way available to employee is to claim for REFUND in his annual return.

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)
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15 March 2008 YES FIRST 15000/- IS LIABLE TO FBT

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