Medical reimbursment

Medical allowance is a fixed allowance paid every month to the employees irrespective of the fact whether they submit the supporting bills or not.

Medical reimbursement is a payment made to an employee against the medical bills produced by him/her subject to his/her entitlement.

The maximum tax benefit available is Rs.15000 per annum.

To help your employees claim tax benefit, kindly advise them to submit bills for the amount of allowance received every month so that there is no problem. Further, you should rename the allownace being paid from "medical allowance" to "medical reimbursement".

Hope this would help you.