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Medical Allowance

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This query is : Resolved

Prasanna Bhat (Querist)
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16 July 2010 Hi,

As per my knowledge medical allowance of 1,250/- is given through salary every month & in the yearend we will submit medical bills to get the exemption.

But in my current employer they are stating that auditors have told that medical allowance exemption cannot be given & only if it is mentioned medical reimbursement then it can be given which is not correct pls let me know whether my stand is correct

jegannath G

jegannath G (Expert)
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16 July 2010 Medical reimbursement to the extent of Rs 15000 is exempted.

Fixed medical allowance is allways taxable.

Hence, if an employer pays medical allowance which is a part of salary is always taxable.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 July 2010 Medical allowance is not specified in the Income tax Act,1961 as an allowance which bears exemption. Hence it is fully taxable in the hands of the employee.

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