Medical Allowance

This query is : Resolved

Harshad Desai (Querist)
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17 November 2008 My Company is paying Rs.1,250/- every month to all employees in their pay slip. This amount has been treated as exempted while calculating tax liability. Without taking any proof/s for amount spent on medical expenses, my Company is taking declaration from employee that the amount received by the employee has been spent for the purpose for which it has been given. Will it be correct on the part of Income Tax Act/Law? What will be the end responsibility of Employee as well as Employer?

Deepak Agrawal

Deepak Agrawal (Expert)
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17 November 2008 Since its fixed, it is allowance. So taxable in hands of employees.

but if it is under medical bills re-imbursement, company will have to take bills from employees

Ravikumar.G

Ravikumar.G (Expert)
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17 November 2008 Further,
Liable for FBT :
Expenditure actually incurred by the employee for medical treatment in an unapproved hospital upto Rs.15,000/- during the year.

Ravikumar.G

Ravikumar.G (Expert)
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17 November 2008 Not Liable for FBT :
Expenditure exceeding Rs.15,000/- during the year, actually incurred by the employee for medical treatment in an unapproved hospital.

Ravi S.

Ravi S. (Expert)
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17 November 2008 I believe it is to be treated in the hands of employee

O.D.SHARMA

O.D.SHARMA (Expert)
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18 November 2008 This 1250/- PM amount is Medical allowance & on submission of bills is tax free,

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