expenditure on some deseases is exempted u/s 80DDB. but if a government employee takes medical reimbursement(MR) is it taxable ? if yes then how? if not will the person gets both benefits i.e exemption u/s 80DDB and no tax on MR?
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Medical reimbursement
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As per section 17(2) of the I T Act , medical reimbursement by an employer is not taxable in hand of an employee as perquisite if treatment of the employee or his family member is done in any of the following hospitals
- Hospital maintained by employer.
- Central Govt or state or municipal maintained hospital
- Any hospital approved by Govt for its employees
- For prescribed diseases or ailments, hospitals approved by Chief Commissioner of Income Tax .
Thus , if the treatment of govt employee or his relative was done in govt hospital or approved hospital, reimbursement of any expense without limit is exempt from tax...
Deduction u/s 80DDB will be
Rs.40,000/-(Rs.60,000/- for senior Indian Citizen) or Actual amount of expenditure
Less: Amount reimbursed by the employer.
Dear expert
if the employee is getting Medical Reimbursement(MR) more than the 80DDB limit then what?
Hi Kumar,
The deduction under section 80DDB shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person.
In nutshell computation of deduction is as under
Total expenditure xxxxx
Less Insurance claim/MR xxxxx
Net Expenditure xxxxx
Net Expenditure allowed as deduction is maximum of Rs 40,000 (Rs 60,000 in case of Sr. Citizen) .Therefore , in your case , you can claim deduction despite getting the MR.
Hi Shruthi,
thanks for ur attention.
As i am a layman, so it is not making my doubts clear. let me repeat
A government employee already availed exemption u/s 80DDB of 40000 and after that he gets medical reimbursement of 2,00,000in same FY. what will be his tax loyability
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