What will be the taxability of amt reimbursed by
Government to a Government employee
on account of medical expenses done by employee?
If exempt then which section and if not then which section?
In lieu of transport allowance and medical reimbursement, now standard deduction has been introduced in the act. As per an amendment in the Budget 2018, tax exemption on medical reimbursement amounting to INR 15,000 and transport allowance amounting to INR 19,200 in a financial year have been replaced with a standard deduction of INR 40,000. This amendment became applicable from FY 2018-19 (i.e. starting 1st April 2018).
From FY 2019-20 onwards, the standard deduction has been raised to Rs. 50,000. (Amended in Budget 2019)
so medical reimbursements are taxable.
Bills incurred for medical treatment of employee or family members of the employee in a hospitals maintained by the employer.
Bills incurred for medical treatment of employee as well as his or her family members in government hospitals or hospitals maintained by local authorities or government approved hospitals.
Medical reimbursement given to the employer for a specific medical treatment for the employee or the employee’s family members. The prescribed diseases or ailments that are permissible for the reimbursement are listed in the Rule 3A of the Income Tax Rules. The list is provided to the hospitals by the Chief Commissioner of Income Tax.
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