Following are fully exempt

  1. Medical Insurance Premium of Employee paid by the company to Insurance Co.   (Approved by IRDA)
  2. Medical Insurance Premium paid by Employee or his family member and then claimed from the company
  1. Free Medical treatment of Employee or his family member within India

                  (a)In hospital of Employer

                  (b)For Prescribed Diseases (Mentioned in Rule 3A) and certificate  received by hospital

                      is fully exempt.

 In other cases, maximum 15000 p.a. exempt as Medical Reimbursement

 4. Medical Reimbursement

 Medical  Bills Reimbursement from Employer up to Rs 15000 per annum is exempt. Doctor / Chemist / Hospital bill is covered here.Even medical bills of family members covered.

                

 

SUMMARY


Medical Treatment / Medical Reimbursement Perquisite - Taxability of Perquisites



 QUESTION

Q1

Basic salary – Rs.20000/− p.m.

Annual medical (reimbursement claimed – 25000)

Calculate income from salary ?

--answer--

Medical Bills reimbursement is exempt upto 15000 p.a.

PARTICULARS Amt Recd Exempt Taxable
Basic Salary 240000   240000
       
Medical Reimbursement 25000 15000 10000
       
INCOME FROM SALARIES     250000

 

--endanswer--

 

Q2

Basic salary 20000

Annual medical reimbursement claimed – 25,000

Medical insurance done Rs.10000 by the Employee and claimed from company

--answer--

Medical insurance claimed is exempt without limit

 (it is not included in 15000 limit )so answer same as last

 

PARTICULARS Amt Recd Exempt Taxable
Basic Salary 240000   240000
       
Medical Reimbursement 25000 15000 10000
Medical Insurance 10000 10000 0
INCOME FROM SALARIES     250000

 

--endanswer--

 

Q3

Basic salary = 20000 per month

Employee become ill and was admitted hospital .

Hospital expenses of Rs.50000 reimbursed by company 

In addition the Employee also claimed medical bill reimbursement  by company of Rs.25000

Calculate  Income from salary . 

--answer--

If treatment is for prescribed diseases or in approved hospital   

        and

Certificate received from hospital

then Rs.50000 reimbursed  is exempt

 

PARTICULARS Amt Recd Exempt Taxable
Basic Salary 240000   240000
       
Medical Reimbursement 75000 65000 10000
       
INCOME FROM SALARIES     250000
       

 

If the above condition is not fulfilled than  it is exempt up to Rs.15000

( Rs.15000 limit is for both medical reimbursement and medical treatment combined) as shown below

PARTICULARS Amt Recd Exempt Taxable
Basic Salary 240000   240000
       
Medical Reimbursement 75000 15000 60000
       
INCOME FROM SALARIES     300000

 --endanswer--

  1. Income Tax
  2. Income from Salaries
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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