Dear Experts
One of our client X Pvt. Ltd. is paying Medical Reimbursement of Rs. 15000 every year to its employees. But the employees don't produce the bills to X Pvt. Ltd. every year. Employees just keep the bills with themselves. Whether the employees can claim the medical reimbursement allowance of Rs. 15000 every year?
If the company is paying medical reimbursement without asking for any bills, then it will be treated as allowance, and shall be taxable.
If the bills are produced and on that basis, medical reimbursement is paid to the employee, then it will be tax-free.
Agree with Mr. Mihir
Company shall keep xerox copy of the bills if employees want bills for future reference.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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