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.




Medical Treatment / Medical Reimbursement Perquisite - Taxability of Perquisites



Basic salary – Rs.20000/− p.m.

Annual medical (reimbursement claimed – 25000)

Calculate income from salary ?




Basic salary 20000

Annual medical reimbursement claimed – 25,000

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




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 . 

  1. Income Tax
  2. Income from Salaries

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 11 years. He also provides Accounts Tax GST Training in Delhi and Pune.