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Medical Allowance

balakmu (22 Points)

24 April 2008

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?

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12 Replies

chetan soni (service) (3784 Points)
Replied 24 April 2008

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.

R.V.RAO (SERVICE) (4125 Points)
Replied 24 April 2008

I AGREE WITH SRI CHETAN SONI

R.V.RAO

(Guest)

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.

Subodh ( ) (402 Points)
Replied 25 April 2008

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.

D. Kanolkar (Accountant) (11 Points)
Replied 06 May 2008

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.

jaideep malik (artical assistant) (78 Points)
Replied 10 May 2008

all type of medical allowance are taxable but you can get the exemption upto Rs.15000/- if you received medical reiumbursement instead of medical allowance

Amit (Service) (20 Points)
Replied 22 September 2008

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.	"

CA RAMESH KUMAR AHUJA (CA, DISA, LLB) (5452 Points)
Replied 07 October 2008

Yes, fixed medical allowance is taxable

(Guest)

Please send me details of Salary taxable calculation

RANGA SRINIVAS (CHARTERED ACCOUNTANT IN PRACTICE) (164 Points)
Replied 31 December 2008

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.

Shudhanshu Agrawal (Business) (2570 Points)
Replied 31 December 2008

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

rakesh (Manager ) (113 Points)
Replied 20 January 2009

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