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Deduction for mediclaim premium & medical re-imbursement

Rachit (Analyst) (913 Points)

12 March 2014

An employee pays mediclaim policy premium of Rs.15,000 p.a. for which he is claiming deduction u/s.80D and the same is granted by the employer. Further he is also entitled to Rs.15,000 as medical reimbursement from the employer, Can he furnish the same mediclaim policy receipt of Rs.15,000/- to the company to claim this amount of Medical Reimbursement ?????

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(Guest)

No,

If an employee receives reimbursement for his medical treatment or the treatment of any member of his family or any of his dependant relatives then a sum up to Rs. 15,000 p.a. is not treated as a taxable perquisite as per Clause (b) of the provision to Section 17 (2) of the I.T. Act. This exemption is enjoyed by the employee only if the expenditure is actually incurred on his medical treatment or for treatment of any member of the family or a dependant relative.

Mediclaim insurance policy premium payment is not an expenditure on medical treatment.

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Rachit (Analyst) (913 Points)
Replied 12 March 2014

Thanks for your reply Madhavi.

But clause (iv) of the 1st proviso to section 17(2) of the Act states as under; whereby reimbursement of medical insurance premium paid by the employee on his health or the health of any member of his family is eligible for exemption from tax.

"(iv) any sum paid by the employer in respect of any premium paid by the employee to effect or to keep in force an insurance on his health or the health of any member of his family under any scheme approved by the Central Government 52[or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999),] for the purposes of section 80D;"

Would like to have your view on the same.