04 February 2012
Plaese advice on same It is clear from reading of section 10(14) of the IT Act,1961 that fixed medical allowances are fully taxable in the hands of employee. Also as per proviso to Section 17(2) of the said Act, reimbursement of medical bill is expemted upto Rs.15,000 in the computation of Income Tax. From above fact, With openion of others person, If company pay fixed medical allowances without collecting any bill they are fully taxable under the head "Salaries". However, practically, I have observe that many company provide fixed medical allowances without collection of any bill and they are also not considered for the computation of TDS on salary. However, there is no case law disaalowing the said expenses or raising any demand for interest u/s 201(1) and 201(1A). Please advice and provide related case law/circular/notification, if any in this regards.
04 February 2012
in my opinion availability/non-availability of case law is irrelevant...practically many things do happen...strictly if the company is not deducting tds on such medical allowance it's a non-compliance on companies part....a practical way out can be....that the allowance can be taxed unless bills are provided....and by march when bills are submitted the amount considered as perquisite can be setoff and net income be used for computing tds
CAclubindia
