We Design Your Financial Destiny


(Precious) Words of Wisdom : "Only those who are asleep make no mistakes." ~ Ingvar Kamprad

Medical expenses reimbursed are tax free if...

Many employers provide reimbursement to their employees, as part of the salary package, for the medical expenses incurred by them on themselves or their family members. 

This amount is entitled to some tax exemptions.

Some of the key provisions in this regard, as per the Income Tax Act, are detailed below.

- The limit to such an exemption is Rs.15,000 per annum. (Note: There is no limit to the amount that your employer may give you as medical reimbursement. But any amount more than Rs.15,000 p.a. would be taxable even if actually incurred.)

- The expenses should be incurred on medical needs of your family which includes your spouse, children and dependent parents / siblings.

- There is no stipulation of any approved hospital or mode of treatment. In other words, expenses on naturopathy, ayurveda, etc. are also covered.

- The key word here is ‘reimbursement’ i.e. only the actual expenses, given against the supporting bills/documents, will be allowed as deduction. If you are receiving any ‘Medical Allowance’, no deduction will be allowed.

In addition to the foregoing, 'full amount' is tax free in the following instances:
- the value of any medical treatment provided to an employee / family members in any hospital maintained by the employer;
- sum paid by the employer in respect of any expenditure actually incurred by the employee on his/family's medical treatment in any Govt. / Govt-approved hospital

As regards medical treatment abroad 
- the actual expenditure on stay and treatment abroad of the employee / family member, including one attendant, is excluded from perquisites to the extent permitted by RBI 
- And if the employee's gross total income does not exceed Rs.2 lakhs, even the expenditure incurred on travel abroad by the patient / attendant is excluded from the perquisites.

An Investment In Knowledge Pays The Best Interest ~ Benjamin Franklin

101 Classic Tips Money Gyaan

You Learn A Lot By READING... And Even More By SHARING.

Share Button

Ignorance is like a SIGNED BLANK CHEQUE... anyone can MISUSE it.

Subscribe via Email
Powered by Blogger.

... Three VALUABLE Tips ...

1. NEW Year. OLD Resolutions. The Timeless Money Maxims.
Timless Money Maxims
It's time to 'sharpen' the OLD resolutions, not write any NEW ones.

 


2. Housewives Too Can Become Millionaires
Millionaire housewives with compounding
Saving for MORE TIME gives much better results than saving MORE MONEY.

 


3. Why Super Top Up Health Insurance Plan Is A Must
Top Up or Super Top Up
Top Up or Super Top Up? The choice is VERY clear...