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Medical Exemption - TDS

10 May 2007

Hi All,

I found your profile in legalservicesindia.com. I need one clarification in Income Tax.

One employee is getting Rs. 12,000/- p.a. Medical Allowance. If he
wish to claim the exemption for the same, what are the documents he
should submit to us for TDS calculations.

a. Does he needs to submit original bills & self certification for
Rs.12,000/-?
b. Does he needs to submit duplicate bills @ self cerfitication?
c. Does the self certification for Rs. 12,000/- is enough for
claiming the exemption?

what kind of documents we need to collect from such employee with
respect to medical exemption.

Can any one please advise.

best regards
Narasimha

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8 Replies

Ajay Gupta (13 Points)
Replied 10 May 2007

Hi

Medical allowance is always taxable in the hand of employee. However medical reimbursement to the extent of Rs. 15000/- p.a.against original bill is exempt under Income Tax Act. FBT is applicable

Ajay Gupta

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Ankit Bhatia (163 Points)
Replied 10 May 2007

Med allowance is fully taxable,as not covered u/s 10(14)

Vinesh Garg (13 Points)
Replied 10 May 2007

Instead of paying it as allowance, amount may be reimbursed to them on submission of original invoices of medical.

Manish (34 Points)
Replied 10 May 2007

Medical allowance is fully taxable. However, reimbursement of medical expenses on submission of proper bills/ receipts of treatment taken is exempt upto Rs. 15000/- p.a. in the hand of the employee. This way only exemption can be claimed.

Aholiyath (31 Points)
Replied 10 May 2007

medical allowance is always taxable.. however re imbursement s exempted upto 15000....

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Rajesh Itty Eapen (111 Points)
Replied 10 May 2007

Medical allowance is fully taxable in the hands of the assessee.An allowance is defined as a fixed amount of money given periodically in addition to the salary for the purpose of meeting some specific requirements. The basic golden rule is that all such allowances are taxable as these are paid because of direct relationship between an employer and employee.

Anyways, SEC17 exempts tax in the following cases:

1) The value of any medical treatment provided to an employee or any member of his family, in any hospital maintained by the employer.

2) Any sum paid by the employer in respect of any expenditure incurred by the employee on his medical treatment or of any member of his family:
a) in any govt or local authority's hospital.
b) In respect of the prescribed diseases or ailments, in any hospital approved by the Chief Commissioner
c) Reimbursement by the employer to the employee for the employee's or any of his family member's treatment from any doc upto Rs.15000.
d) Premium paid by the employer in respect of approved medical insurance taken for his employees
e) if medical treatment is done abroad, then the expenditure incurred on stay and treatment of the employee and any member of his family/one attendant who accompanies the patient, will be exempted to the extend permitted by the RBI. but the assessee's gross income should not exceed Rs.2 lakhs.

I guess the bills you get from any doc/hospital will do....(not very sure about the documents)

regards
rajesh itty eapen

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Replied 10 May 2007

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