Mediclaim insurance

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2014 Dear Experts,

If a company paid mediclaim insurance to insurance company on behalf of employees and take the amount every month from employees salary.

So, Please suggest that how to pass entries in tally.

Querist : Anonymous

Querist : Anonymous (Querist)

06 February 2014 Waiting for answer please send the reply asap

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2024 To record the transactions related to mediclaim insurance in Tally, where the company pays the insurance premium on behalf of employees and then recovers the amount from employees’ salaries, you need to pass entries for both the payment to the insurance company and the recovery from employees. Below are the steps to record these entries:

### 1. **Initial Payment to the Insurance Company**

When the company pays the mediclaim insurance premium to the insurance company, you need to record this payment as an expense.

**Journal Entry for Payment:**
```
Date: [Payment Date]

Dr. Mediclaim Expense Account [Amount Paid]
Cr. Bank Account [Amount Paid]
```

- **Mediclaim Expense Account**: This is an expense account that represents the total cost of mediclaim insurance.
- **Bank Account**: This is the account from which the payment is made.

### 2. **Recovery from Employees' Salaries**

When recovering the amount from employees' salaries, you need to record the recovery against the employees' salaries and recognize it as income or adjustment.

**Journal Entry for Recovery:**
```
Date: [Date of Recovery]

Dr. Employees' Salary Account (or Salary Payable Account) [Amount Recovered]
Cr. Employee Deductions Account [Amount Recovered]
```

- **Employees' Salary Account (or Salary Payable Account)**: This represents the total salary payable to employees.
- **Employee Deductions Account**: This is a liability account to track amounts recovered from employees.

### 3. **Transfer of Recovery Amount to Insurance Expense**

If you want to keep the mediclaim recovery separate from the mediclaim expense, you can transfer the recovered amount to the mediclaim expense account to offset the expense.

**Journal Entry for Transfer:**
```
Date: [Date of Transfer]

Dr. Employee Deductions Account [Amount Recovered]
Cr. Mediclaim Expense Account [Amount Recovered]
```

- **Employee Deductions Account**: This account is debited to show that the recovered amount is no longer a liability.
- **Mediclaim Expense Account**: This account is credited to reduce the mediclaim expense by the amount recovered.

### 4. **Summary of Entries in Tally**

1. **Payment to Insurance Company:**
- **Dr. Mediclaim Expense Account**
- **Cr. Bank Account**

2. **Recovery from Employees' Salaries:**
- **Dr. Employees' Salary Account (or Salary Payable Account)**
- **Cr. Employee Deductions Account**

3. **Transfer of Recovery Amount:**
- **Dr. Employee Deductions Account**
- **Cr. Mediclaim Expense Account**

### Example:

Assume the following scenario:
- The company pays ₹1,00,000 as mediclaim premium.
- The company recovers ₹1,00,000 from employees’ salaries.

**Payment to Insurance Company:**
```
Dr. Mediclaim Expense Account ₹1,00,000
Cr. Bank Account ₹1,00,000
```

**Recovery from Employees' Salaries:**
```
Dr. Employees' Salary Account ₹1,00,000
Cr. Employee Deductions Account ₹1,00,000
```

**Transfer of Recovery Amount:**
```
Dr. Employee Deductions Account ₹1,00,000
Cr. Mediclaim Expense Account ₹1,00,000
```

### Additional Notes:

- **Employee Deductions Account** can be classified under “Current Liabilities” in Tally.
- **Mediclaim Expense Account** is classified under “Indirect Expenses” or “Operating Expenses.”

Make sure to customize these entries according to your company's accounting policies and the structure of your Tally accounts. Always consult with an accountant to ensure compliance with accounting standards and tax regulations.

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