Income Tax Treatment for perquisites and allowance given to employees under different heads like Medical allowance, Medical Reimbursement, Medical Treatment Allowance or Medical Treatment in employer hospital etc. Income Tax provide different tax treatment Medical allowance, Medical Reimbursement and Medical Treatment hospital. As Medical Allowance is fully taxable and Medical Reimbursement is exempted upto Rs 15000/- subject to employee giving medical expenses bills and Memo. So individual claim deduction of Rs 15000/-
For the purpose of Income Tax Act, any payment made by employer to employee will be taxed under Income Tax head” Income From Salary” and with the increase in the cost of medical facilities employers are providing different medical facilities either directly or indirectly through different corporate tie ups.
Treatment in India | |
Medical allowance | Fully taxable |
Medical treatment in own hospital of employer (for employee and his family members) | Tax free |
Mediclaim insurance policy/ reimbursement of premium for employee & family members | Tax free |
Reimbursement of medical expenditure for employee or his family | |
|
Exempt up to 15000 |
|
Fully exempt |
|
Fully exempt |
Some large corporate houses are maintaining hospitals for its employees and their families. One of the good example is of Cement and Mining companies which generally provide medical facilities to employees living in company accommodation or colonies which are near to factories but are quite far from cities from the income tax perspective it will be not be taxed.
Treatment outside India | |
Staying expenditure of patient or one attendant | Prescribed by RBS is Exempt |
Treatment expenditure of patient | Prescribed by RBS is Exempt |
Travelling expenditure of patient or one attendant | |
|
Exempt |
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Fully taxable |
Note:
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Family means:
- Spouse and children of employee.
- Parents, brother and sister wholly dependent on employee.
- Spouse and children of employee.
- The perquisite is taxable to both specified and non- specified if bills are issued in the name of employee and payment is made by employer
- Employee should with return of income a certificate from the hospital
Please clarify as to income receivable as employees group insurance savings part amount as released by the govt. at the discontinuation of the scheme. whether such amount is exempted from IT.