medical reimbursement

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 April 2011 Currently in our organization we are paying Medical reimbursement ( Rs. 15000 p.a.) annually in ( March) based on the actual bills submitted by each employee. Instead of that can we pay medical reimbursement every month ( Rs. 1250) & ask our employee to submit the bills from December to March to calculate actual tax liability in March. Is there any TDS omission from employers perspective, because employer will pay Medical reimbursement ( Rs. 1250) every month but deducting the TDS only in the month of January, February & March.
Because TDS rule says “ credit or payment whichever is earlier” you have to deduct the TDS on salary.
Further practically it is impossible for every employee to submit the Medical bills as well as Finance Department to check the same.
What is the way out?

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)

28 April 2011 you can do that... for the safe side, take a declaration from employees stating like... my previous year medical expenditure was so and so... this year, and based on my experience and situation my annual expenditure will go beyond 15000..

Querist : Anonymous

Querist : Anonymous (Querist)

28 April 2011 Thank you sir. But my another concern is if any of employee "absconded" in the year then company has to bear the tax liability.

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