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Medical allowance

Krishna (Manager - Genesis Tax Consultant) (531 Points)

12 July 2018

Dear Sir,

An individul failed to produce the Medical bills for the Medical allowance received in Payslip. Hence Company didn't allow exempt on it. However he spent Medical expenses during the year, When filing the Income tax returns, is there any possibilities to claim for this expenses? Please clarify me.

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4 Replies

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 12 July 2018

YES, YOU MAY CLAIM EXPENSE REIMBURSEMENT UPTO 15000/-

CONDITIONS APPLIED RELATED TO RELATIVES DEFINITION.

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Praveen Philip (.) (55 Points)
Replied 12 July 2018

Medical Allowance recieved from employer is fully taxale.

When any medical expensess is incurred by employee and that expenses has been reimbursed by the emplyoer only upto 15,000/- is excempt.

eg. If you have incurred medicale expense 50,000 and your emplyer has reiumbursed 50,000 for your medical expenses incurrend. you will be taxed 35,000 as allowance under the head salary.

50,000(total expense) - 15000(exemption)= 35,000/-

Krishna (Manager - Genesis Tax Consultant) (531 Points)
Replied 12 July 2018

Thank you for the information.

My question is here, he didn't provide the bills to Management and finance team didn't allow exempt on Medical allowance they considered it fully taxable. However he has Medical bills for 15,000/-

For my bettter understanding, Please clarify me, is it possible to take this amount in 80D when we file the income tax returns.

Z ( ) (2965 Points)
Replied 13 July 2018

I think there is some confusion between "Medical allowance" & "medical reimbursement".

Under the head salary, all the sum to be received/receivable by the employee is essentially part of the salary, unless it is excluded by some other provision.

There is no exclusion for medical allowance and it is always taxable.

Medical reimbursement is not included in the perquisites uptil 15,000. [For more details see below]

It is the responsibility of the employer to provide the details of the amount sort as deduction or exemption. In the absence of the documentary evidence, the actions of the employer were justified.

ONLY following expenses are allowed u/s80D (AND NO OTHER EXPENSE CAN BE CLAIMED U/ SAID SECTION)

(a) the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family or any contribution made to the Central Government Health Scheme or such other scheme as may be notified by the Central Government in this behalf or any payment made on account of preventive health check-up of the assessee or his family as does not exceed in the aggregate twenty-five thousand rupees; and*

(b) the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee or any payment made on account of preventive health check-up of the parent or parents of the assessee as does not exceed in the aggregate twenty-five thousand rupees;

(c) the whole of the amount paid on account of medical expenditure incurred on the health of the assessee or any member of his family as does not exceed in the aggregate 27[thirty]thousand rupees; and

(d) the whole of the amount paid on account of medical expenditure incurred on the health of any parent of the assessee, as does not exceed in the aggregate 27[thirty] thousand rupees:

However, I would advise you to claim the deduction while filing the return.

From now on, we have back the concept of standard deduction wherein the submission of such documents would not be required. If you have the proof of deduction then it may be claimed. Go for it.

17. For the purposes of sections 15 and 16 and of this section,—

(2) "perquisite" includes—

Provided that nothing in this clause shall apply to,—

(v) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family other than the treatment referred to in clauses (i) and (ii); so, however, that such sum does not exceed fifteen thousand rupees in the previous year;