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Medical reimbursement given to employee.

Soni (Service) (35 Points)

06 March 2009

Medical reimbursement given to employee. The spouse of the employee got admmitted in "Bombay hospital", trust hospital. The amount was reimbursed to the employee (>15,000). The hospital is also enlisted in Central Govt. health scheme book as recognised private hospital for treatment. Please advise whether the same shall be considered as tax free perqisite or taxed (since not a central or state govt hosp and no certificate obtained by the employee from the hospital certifying the ailment and bill amount, it was added to the employees income and tax was deducted. Also, if the same is tax free, please advise how the adjustment can be made.

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Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 06 March 2009

Soni

Look as per income tax act

"if any sum is paid by the employer for expenditure actually incurred by the employee for medical treatment in an unapproved hospital and it does not exceed Rs. 15,000 during the year, such sum does not fall within the meaning of ‘salary’ as defined in clause (1) of section 17 of the Income-tax Act "

And

"if any sum is paid by the employer for expenditure actually incurred by the employee for medical treatment in an unapproved hospital and it exceeds Rs. 15,000 during the year, such sum is ‘salary’ as defined in clause (1) of section 17 of the Income-tax Act and liable to income-tax in the hands of the employee"

Hope now you will clear about it.And if u deducted TDS & adjust the same in next maonth salary.