Reimbursement of mediclaim premium and deduction u/s 80d
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 April 2013
I have paid the Mediclaim premium for me and my Family (spouse and son). My employer has reimbursed me the said premium. In view of clause (iv) of proviso to section 17(2) it is not taxable perqusite. Thus, no TDS to be deducted thereon.
My query is whether I can claim the deduction u/s. 80D in respect of Mediclaim premium initially paid by me but later on reimbursed by my employer.
I understand that section 80 D speaks about individual and HUF and only prior requirement is that the premium shall be paid out of income chargeable to tax and I feel that I have complied with the requirement of section 80 D by paying the premium out of my salary income. The event of reimbursement is occurred subsequently.
Whether my understanding is correct , can i take dual benefit?
My query is whether I can claim the deduction u/s. 80D in respect of Mediclaim premium initially paid by me but later on reimbursed by my employer.
I understand that section 80 D speaks about individual and HUF and only prior requirement is that the premium shall be paid out of income chargeable to tax and I feel that I have complied with the requirement of section 80 D by paying the premium out of my salary income. The event of reimbursement is occurred subsequently.
Whether my understanding is correct , can i take dual benefit?
01 April 2013
No, You will not be eligible for deduction u/s 80 D since at the end such premium is paid out of exempt income.
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 April 2013
But sir for the purpose of section 80D i have proved the nexus between taxable income(salary) and payment of premium at the event of payment of premium. Later on by the year end i may get it reimbursed from employer. Section 80D doesnt impose any such restriction that any amount recovered from employer should be reduced from deduction as specifically given in section 80DD and 80DDB.
Experts views are solicited.
Experts views are solicited.
20 July 2025
This is a nuanced and very insightful query — let’s carefully address it from the legal and practical tax interpretation of Section 80D and Section 17(2)(iv) of the Income Tax Act.
📌 Your Situation:
You (the employee) paid the Mediclaim premium for self, spouse, and child — which is allowed under Section 80D.
Your employer reimbursed that amount later.
You're claiming:
It’s not taxable as perquisite (exempt under Section 17(2)(iv)).
You should still be eligible to claim Section 80D deduction because the premium was paid out of taxable income initially.
Let’s examine both parts.
🔹 1. Taxability as perquisite (Section 17(2)(iv))
You're absolutely right here:
Section 17(2)(iv) excludes from perquisites:
"any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or insurance for self and family, under a scheme approved by the employer."
So, reimbursement of Mediclaim premium is not taxable, and no TDS is required — ✅ correct.
🔹 2. Eligibility for deduction under Section 80D
This is where the real debate lies.
🚫 General principle:
Section 80D allows deduction only if the premium is “paid” by the assessee (i.e., the individual) and not reimbursed.
Once reimbursed, the net cost to you becomes zero — so technically, you didn’t “bear” the expenditure.
Therefore, dual benefit is not intended under the law — i.e., you cannot claim deduction if your employer ultimately bears the cost.
⚖️ CBDT Circulars and judicial interpretations have consistently held that to claim a deduction under 80D, the actual burden of premium must lie with the assessee.
🔍 Your argument:
"I paid from my taxable income, reimbursement happened later. Section 80D doesn’t bar reimbursement, unlike 80DD and 80DDB."
True — Section 80D doesn’t explicitly disallow reimbursed amounts.
But deduction under Chapter VI-A (which includes 80D) is allowed only if expenditure is borne by the taxpayer.
Timing of reimbursement is not material — what matters is who ultimately bears the cost.
So, even though you paid it first, once you are reimbursed, the final burden is not on you.
✅ Conclusion:
Point Verdict
Taxability of reimbursement (Sec 17(2)(iv)) ✅ Not taxable – Exempt
Eligibility for deduction u/s 80D ❌ Not allowed once reimbursed
You cannot claim Section 80D deduction for Mediclaim premium that is later reimbursed by your employer — even if paid upfront from your salary income.
🧾 Practical Tip:
If you want to claim 80D deduction, consider:
Requesting your employer not to reimburse the premium.
Or, reimbursements can be structured only for preventive checkups or OPD (if allowed), while premium remains your own cost.
📌 Your Situation:
You (the employee) paid the Mediclaim premium for self, spouse, and child — which is allowed under Section 80D.
Your employer reimbursed that amount later.
You're claiming:
It’s not taxable as perquisite (exempt under Section 17(2)(iv)).
You should still be eligible to claim Section 80D deduction because the premium was paid out of taxable income initially.
Let’s examine both parts.
🔹 1. Taxability as perquisite (Section 17(2)(iv))
You're absolutely right here:
Section 17(2)(iv) excludes from perquisites:
"any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or insurance for self and family, under a scheme approved by the employer."
So, reimbursement of Mediclaim premium is not taxable, and no TDS is required — ✅ correct.
🔹 2. Eligibility for deduction under Section 80D
This is where the real debate lies.
🚫 General principle:
Section 80D allows deduction only if the premium is “paid” by the assessee (i.e., the individual) and not reimbursed.
Once reimbursed, the net cost to you becomes zero — so technically, you didn’t “bear” the expenditure.
Therefore, dual benefit is not intended under the law — i.e., you cannot claim deduction if your employer ultimately bears the cost.
⚖️ CBDT Circulars and judicial interpretations have consistently held that to claim a deduction under 80D, the actual burden of premium must lie with the assessee.
🔍 Your argument:
"I paid from my taxable income, reimbursement happened later. Section 80D doesn’t bar reimbursement, unlike 80DD and 80DDB."
True — Section 80D doesn’t explicitly disallow reimbursed amounts.
But deduction under Chapter VI-A (which includes 80D) is allowed only if expenditure is borne by the taxpayer.
Timing of reimbursement is not material — what matters is who ultimately bears the cost.
So, even though you paid it first, once you are reimbursed, the final burden is not on you.
✅ Conclusion:
Point Verdict
Taxability of reimbursement (Sec 17(2)(iv)) ✅ Not taxable – Exempt
Eligibility for deduction u/s 80D ❌ Not allowed once reimbursed
You cannot claim Section 80D deduction for Mediclaim premium that is later reimbursed by your employer — even if paid upfront from your salary income.
🧾 Practical Tip:
If you want to claim 80D deduction, consider:
Requesting your employer not to reimburse the premium.
Or, reimbursements can be structured only for preventive checkups or OPD (if allowed), while premium remains your own cost.
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