Hi
We want to Pay a fixed monthly Medical Allowances instead of Medical Reimbursement to our employee (the same is taxable on the hand of employees)
My Question is at the time computing the Employees Income Tax whether This Medical Allowance upto Rs. 15,000/- can be shown as Deduction from the Taxable Income.
If yes, what will be the consequences for employees?
Any Fixed Medical Allowances given is taxable in the hands of employees. If you gave under name of reimbursement then it can be considered as deduction while computing the income tax, OTHERWISE YOU SHOULD IT THIS TO INCOME.
I AGREE WITH SRI CHETAN SONI
R.V.RAO
medical allowance is fully taxable in the hands of employee irrespective of expenditure incurred. but the reimbursement shall be exempt upto Rs.15,000 and above this amount shall be taxable in the hands of employee.
If employee submiiting medical bills(claiming reiumbursement) then this amount should be deducted from his Taxable income (Yearly Gross salary ) otherwise the amount is fully taxable.
my Q is i am getting medical allowances in my salary per month, is it taxable or not ?
pls reply
| Originally posted by :Guest | ||
| " | Medical bills anounting to Rs. 2 Lacs were submitted to employer for reimursement and around 1.10 Lac was approved & reimbursed by the emloyer stating subject to TDS applicable. Pl. advise whether the Tax applicable on the bills for the sickness like Cancer. | " |
Yes, fixed medical allowance is taxable
Please send me details of Salary taxable calculation
The amount of Rs. 15000 should not form part of monthly salary. Reimburse medical expenses to the extent of Rs. 15000. on submission of bills. Then it will not be taxable.
If medical allowances are paid by the employer as the part of the Salary Structure then such allowances should be taxable in the hands of the employee.....whereas if they are not the part of the salary then we can say that employer is reimbursing the amount and then Rs. 15000 deduction can be allowed
Definately medical allowance in the hands of your employees taxable but at the time of filling their return of income tax they can cliams the same up to Rs.15000/-.It is nothing but deduction after submission of bills to you (ie Employer ) . Hence you can make deduction in your pay slip while calculating tax for TDS nothing else.
Thanking You
Rakesh
CAclubindia
