Whether income tax attracts to reimbursement

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Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2010 Hi

This is Ganesh, Good morning to all.

There is a policy of a company that, every employee can reimburse of his expenditure for medical for Rs 1250 per month on producing of bills and this reimbursement is not part of the salary.Based on the policy, all employees are reimbursing of their medical expenses by producing the bills for the above mentioned amount.

As the accounts department is depositing the amount to the respective employee salary bank accounts every month, who are all eligible. Now the question is that whether this reimbursement of expenses are attract the income tax.

required justifications for attracting or not attracting the income tax

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

16 August 2010 please refer the sec.17(2) valuation rules for Medical facilites from employer, up to Rs.15000 is exempted from Income tax

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Querist : Anonymous

Querist : Anonymous (Querist)

17 August 2010 Thank you Mr Ramesh....

i need little bit more clarification on that one, as the reimbursement of medical expenditure is not part of salaries....its just eligible for all employees who are all working..

now my understanding is that:

1. reimbursement is not part of salary, so its not an income to the employee
2. the gross salary which he recieves from the employer is showing in his/her return, so how come this limits(15000) applicable...if time permits for you..can u send me the exact print to my mail id..my mail id is ganeshgudisa@yahoo.co.in...

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

17 August 2010
1.The condition is , The reimbursment need to get from employer whether part of salary or not both are exempted

2.As per the act the medical reimbursment need to add to the salary perqusite only if the amount exceeds Rs.15000. if the amount is below or at Rs.15000, no need to add to Gross salary

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