It is a common demand of Pensioners who are getting Medical Treatment as huge amount per month that how much Medical Allowances are taxable or exempt from Income Tax.
In this regard the question is raised about the income tax treatment of medical allowances / reimbursement in the hands of the employee. For the mass benefit, we are summarizing the income tax implications in the hands of employee on the medical expenses reimbursement for medical facilities in India.
1. The fixed medical allowance given to an employee is taxable.
2. Medical reimbursement done to an employee by an employer is not taxable in the hands of an employee, if treatment of the employee or his family member is done in any of the following hospitals:
a] Hospital maintained by an Employer
b] Hospital maintained by Central Government or State Government or Local Authorities
c] Hospital approved by Government for its employees
d] For certain prescribed diseases/ailment, hospital approved by the Chief Commissioner of Income Tax.
The reimbursement in (a) to (d) shall be tax free without any upper ceiling or cap.
3. In respect of reimbursement of medical expenses reimbursement done to an employee for treatment in any hospital other than those covered in (a) to (d) above, there is a maximum cap of Rs. 15,000/-.
With above basic idea the reply of the queries are as under:
a. In general, Medical reimbursement up to Rs. 15,000/- is tax free. There is no bar of having an allopathic treatment only for claiming an exemption. Exemption can also be claimed for Homeopathic Medical treatment.
b. Fixed medical allowance is taxable. Subject to maximum cap of Rs. 15,000/-, reimbursement of medical expenses supported by bills / vouchers are exempt from income tax.
In this regard the question is raised about the income tax treatment of medical allowances / reimbursement in the hands of the employee. For the mass benefit, we are summarizing the income tax implications in the hands of employee on the medical expenses reimbursement for medical facilities in India.
1. The fixed medical allowance given to an employee is taxable.
2. Medical reimbursement done to an employee by an employer is not taxable in the hands of an employee, if treatment of the employee or his family member is done in any of the following hospitals:
a] Hospital maintained by an Employer
b] Hospital maintained by Central Government or State Government or Local Authorities
c] Hospital approved by Government for its employees
d] For certain prescribed diseases/ailment, hospital approved by the Chief Commissioner of Income Tax.
The reimbursement in (a) to (d) shall be tax free without any upper ceiling or cap.
3. In respect of reimbursement of medical expenses reimbursement done to an employee for treatment in any hospital other than those covered in (a) to (d) above, there is a maximum cap of Rs. 15,000/-.
With above basic idea the reply of the queries are as under:
a. In general, Medical reimbursement up to Rs. 15,000/- is tax free. There is no bar of having an allopathic treatment only for claiming an exemption. Exemption can also be claimed for Homeopathic Medical treatment.
b. Fixed medical allowance is taxable. Subject to maximum cap of Rs. 15,000/-, reimbursement of medical expenses supported by bills / vouchers are exempt from income tax.
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