Medical bills exempt upto 15000/-

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2015 Dear Experts,

What are the conditions of furnishing the medical bills upto 15000 for Exemption.

if the employee submit the bills end of the year (bill date i.e. jan, Feb, march, can he get the full exemption

or they can manage the date for whole year and produce the bills of Rs. 15000/-

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

30 January 2015 can any one reply / response of the same

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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03 August 2024 Under the Income Tax Act, the provisions for claiming exemption on medical reimbursement have certain rules and conditions. To provide clarity:

### Medical Reimbursement Exemption (Prior to Finance Act, 2018)

Under **Section 10(14)** of the Income Tax Act, an exemption of up to ₹15,000 per annum was allowed for medical reimbursement provided by the employer. However, please note that this provision was revised and the exemption limit was withdrawn after FY 2017-18, replaced by a standard deduction.

### Conditions for Claiming Medical Reimbursement Exemption:

1. **Actual Reimbursement:**
- The exemption was available for the actual amount of medical expenses reimbursed by the employer, up to the limit of ₹15,000. This means the amount of exemption was limited to the amount actually reimbursed by the employer.

2. **Submission of Bills:**
- Employees were required to submit medical bills to their employer for reimbursement. These bills should pertain to medical expenses incurred during the financial year.

3. **Timing of Bill Submission:**
- Ideally, the bills should be submitted within the same financial year. If bills are submitted late, it should be within the same financial year to claim the exemption for that year.

4. **Bill Dates:**
- It is not necessary for the bills to be dated throughout the year. However, for a valid claim, the bills should relate to expenses incurred during the financial year for which the exemption is being claimed.

5. **Full Exemption for Late Submission:**
- If medical bills are submitted towards the end of the financial year (e.g., January, February, March), they can still be claimed as long as they pertain to medical expenses incurred within that financial year and are submitted in time as per the employer's policies.

6. **Maintaining Records:**
- It is crucial to maintain records of all medical expenses and ensure that the reimbursement claim is supported by valid bills and receipts.

### Practical Example:

- **If an employee incurs medical expenses in various months of a financial year,** they can submit all the bills for those expenses at the end of the year, as long as:
- The total reimbursement claimed does not exceed ₹15,000.
- The expenses are incurred within the same financial year.
- The bills are submitted according to the employer’s policy for reimbursement.

### Post-Finance Act, 2018:

Since the Finance Act, 2018, the exemption for medical reimbursement has been replaced with a standard deduction. For FY 2018-19 and onwards:

- **Standard Deduction:** Employees are now entitled to a standard deduction of ₹40,000 (later increased to ₹50,000) which includes medical reimbursements and other allowances. The medical reimbursement exemption of ₹15,000 is no longer available.

### Summary:

1. **Submission Timing:** Bills can be submitted at the end of the financial year, and you can claim the full ₹15,000 exemption as long as the bills pertain to expenses incurred in the same financial year.
2. **Record Keeping:** Maintain accurate records and ensure compliance with your employer’s reimbursement policies.
3. **Revised Provisions:** For FY 2018-19 and onwards, the exemption is replaced by a standard deduction, so the previous rules no longer apply.

For the most accurate and personalized advice, especially in relation to specific circumstances or changes in tax laws, consulting a tax professional or chartered accountant is recommended.

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