The amount of reimbursement (part or full) made by an employer, of a medical health insurance policy premium paid by cheque by an employee, is said to be tax exempt in the hands of the employee, vide Sec 17(2), Proviso, of the Income-Tax Act.
The question arises whether the employee who receives such reimbursement from the employer, is entitled to claim the entire amount of the premium paid (subject to applicable limits) in his Income-Tax Return under Section 80D, or should restrict the amount of deduction to the net amount of premium - i.e., the actual premium paid less the amount reimbursed by the employer.
Example: Employee pays medical health insurance premium for self - Rs. 20,000/-.
Employer reimburses an amount of Rs 8,000/- against this premium paid.
How much should be allowed to be claimed u/s 80D - Rs 20,000/- or Rs 20,000/- less Rs 8,000/- = Rs 12,000/-?
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