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query on medical allowance

CA Piyush Jain (A Practicing CA) (211 Points)

04 January 2010

pls give me details on medical allowances very soon its argent.

can we give to an employee meddical aalowances on bills basis which is more than 15000/- or now fbt also not applicable so should it be taxable or what?

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2 Replies

FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 04 January 2010

Dear Piyush,

Medical allowance is fully chargeable to tax in the hands of the employee.

However, medical facility (value of medical benefits) provided to an employee and his family by his employer is not treated as perquisite depending upon

1.Place of treatment (India or outside India)

2.Type of hospital in which treatment is taken

Reimbursement by employer of ampunt spent by the employee obtaining medical treatment for himself or any member of his family from any doctor not exceeding Rs. 15,000 in a year is not treated as perquisite.

There are many others also which are not treated as perquisite.Please read Rule 3A for details.

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Amir (Learner) (4016 Points)
Replied 04 January 2010

Hi Friend,

GENERALLY PAYMENTS BASED ON BILLS ARE KNOWN AS REIMBURSEMENT i:e PERQUISITES AND NOT ALLOWANCES..

REIMBURSEMENTS OF MEDICAL EXPENSES UPTO RS. 15,000 IN A FINANCIAL YEAR IS EXEMPT IN THE HANDS ON EMPLOYEES..ANY AMOUNT REIMBURSED IN EXCESS OF RS/ 15,000 WILL BE TAXABLE AS PERQUISITES UNDER THE HEAD SALARY..