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Tax Query

Parmod Agarwal (Assistant Manager) (394 Points)

11 February 2010

Dear All,

In our Company Some employees was joined in NOvember,2009. They get the Medical Reimbursment from the company. In the 5 Month period of Service their medical reimbursment are near about 20000. Can we allow Rs. 15000/-

deduction or 6250 deduction (15000/12*5 month) as Tax Free Reimbursement? Please clarify the same.

Thanks

Parmod

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6 Replies

Amir (Learner) (4016 Points)
Replied 11 February 2010

Dear Pramod,

The limit of 15k is for entire FY but the same can be claimed as a one time expenditure, so no problems u can allow full 15k even to those emplyees who have joined during the year i:e were not with the company for the entire previous year.......

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Chintan Shah (-) (534 Points)
Replied 11 February 2010

Amir, suppose if during their previous employement these employees have claimed some amount as medical reimbursement and has been allowed by previous employer while deducting tds than what needs to be done??

Amir (Learner) (4016 Points)
Replied 11 February 2010

Dear Chintanshah,

I was expecting this question -

Sec 17(2), defines perquisite & the provisio read as under

Provided that nothing in this clause shall apply to -

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;

Therefore the aggregate exemption cannot exceed 15,000

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manish (Article Assitant) (358 Points)
Replied 12 February 2010

Employee can get the deduction of Rs.15,000/- there is no issue regarding the period of medical reimbursment. So you can claim deduction of 15,000 for 1 month or for full py.