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perquisite of medical facility

Heerak Jain (18 Points)

05 May 2019

company reimbursed medical treatment bill of his brother of 25000 who is dependent on him is exempted or not

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A B Kundu (Professional) (1422 Points)
Replied 05 May 2019

There are a number of deductions and exemptions allowed under the Income Tax Act. One of these exemptions relates to medical bills and related expenses incurred during the Financial Year by an individual. These expenses include those made for treatment of self as well as family members/dependents. Reimbursement of medical expenses to salaried employees by their employers does not come under the tax ambit. The following conditions need to be fulfilled in order to claim this exemption :

Medical expenses incurred on self, spouse, children or completely dependent parents & siblings can only be claimed for exemption.
These medical bills can relate to medicines bought from medical shops or pharmacies or treatment of an ailment done at any clinic, private hospital or public hospital.
These medical bills need to be submitted only with the employer. No reimbursement can be claimed at the time of filing the income tax return.
Tax exemption that can be claimed in lieu of medical bills plus transport allowances is capped at a standard deduction of INR 40,000 per year.
From FY 2018-19, a standard deduction of INR 40,000 in lieu of travel, medical expense reimbursement and other allowances has been proposed for salaried employees and pensioners. To claim this standard deduction, there is no need to submit medical bills to your employer.

A salaried employee either receives a fixed medical allowance or is allowed a reimbursement by the employer.