Some employers present medical reimbursement facility to their workers for the medical bills incurred by the staff. This text defined the levy of Revenue Tax on Medical Reimbursement offered by the employer to the worker.
Revenue Tax on Medical Reimbursement exempt as much as Rs. 15000
No Revenue Tax on Medical Reimbursement is levied as much as Rs. 15000 offered all payments for a similar are furnished by the worker to the employer.
Such exemption of Rs. 15000 from the levy of Revenue Tax on Medical Reimbursement is the cumulative exemption allowed in a monetary 12 months for the quantity really incurred by the worker for acquiring the medical remedy of self or any of his relations
Household for the aim of Medical reimbursement means:-
- The partner and Kids of the worker. Kids could also be dependent or Impartial, married or single
- Dad and mom, Brothers and Sisters of the worker who’re wholly or primarily depending on the worker.
The payments of Rs. 15000 ought to essentially be furnished by the worker to the employer. Nonetheless, these payments mustn’t essentially be of Govt hospitals or any specified hospital. Payments for any expense incurred on Medical Remedy of self or relations in any Personal Hospital/Clinic and so on. may also be furnished for Medical Reimbursement to be handled as a tax-free perquisite.
Any quantity in extra of Rs. 15000 being reimbursed to the worker by the employer could be added to the revenue underneath head wage and on the time of submitting of revenue tax return, tax could be liable to be paid on the identical as per the revenue tax slabs of the person.
- Computation of Revenue Tax on Wage
- Present Revenue Tax Slab Fee in India
- Process for submitting Revenue Tax Return
Aside from this Medical Reimbursement of Rs. 15,000 being handled as tax-free perquisite, there are different sure different medical therapies that are handled as tax-free perquisites.
Nonetheless, there are a number of situations which must be happy for such different medical reimbursements to be categorised as tax-free perquisites. These situations have been defined beneath on this article.
Revenue Tax on Medical Reimbursement and Medical Allowance
Some employers additionally present their workers with Medical Allowance. The distinction between Medical Reimbursement and Medical Allowance is that in Medical Reimbursement, the worker first has to incur the expense from his personal pocket after which present the payments to his employer, who will then reimburse the precise quantity spent.
Nonetheless, in Medical Allowance, the employer provides a pre-specified quantity to the worker regardless of the expense incurred by the worker. The worker is just not even required to furnish the payments to the employer.
It needs to be famous that though No Revenue Tax on Medical Reimbursement is levied as much as Rs. 15,000, the quantity obtained as Medical Allowance could be absolutely taxable as it isn’t coated underneath the tax-free allowances for workers.
- Allowances exempted underneath Part 10 for Salaried Staff
- 8 helpful Revenue Tax exemptions for Salaried Staff
Revenue Tax on particular Medical Reimbureme Msnt/edical Facility in IndiaSection 17(2) and no Revenue Tax on Medical Reimbursement/Medical Services is levied within the following circumstances for remedy in India:-
Aside from Medical Reimbursement of Rs. 15,000 being handled as a tax-free perquisite, the next are additionally handled as tax-free perquisites underneath p
- The worth of any medical remedy offered to an emloyee or any member of his household in any hospital, maintained by the employer.
- Medical reimbursement offered by an employer to an worker for medical remedy of self or relations in any hospital maintained by the Govt. Or Native Authority or in a hospital accredited by the Govt for remedy of its workers.
- Medical reimbursement offered by an employer to an worker for medical remedy of self or any of his member of the family’s medical remedy in revered of the prescribed illnesses or illnesses as prescribed in Rule 3A of the Revenue Tax Guidelines in any hospital prescribed by the Chief Commissioner of Revenue Tax. Nonetheless, in such circumstances, the worker has to connect alongside along with his revenue tax return, a certificates from the hospital specifying the illness or ailment for which medical remedy was required and the receipt for the quantity paid to the hospital.
- Any portion of the Insurance coverage premium paid by the employer for insurance coverage and well being of the worker underneath a scheme accredited by the Common Insurance coverage Firm.
- Any reimbursement by the employer of any insurance coverage premium paid by the worker, for an insurance coverage for his well being or the well being of any member of his household underneath a scheme accredited by the Common Insurance coverage Company of India for the aim of Part 80D can be a tax-free perquisite.
Revenue Tax on Fee for Medical Remedy outdoors India
The next expenditure incurred by employer on remedy of the worker or his relations outdoors India can be a tax-free perquisite:-
- Bills on Medical Remedy of the worker or any member of his household outdoors India. Nonetheless, such bills shall be tax free perquisite to the extent permitted by RBI.
- Bills on keep overseas of the worker or any member of his household for medical remedy with one attendant who accompanies the affected person in reference to such remedy. The bills shall even be handled as tax free perquisite to the extent permitted by RBI.
- Journey bills of the affected person (worker or his member of the family) and one attendant who accompany the affected person in reference to such medical remedy. It shall be tax free within the case of these workers whose gross complete revenue (earlier than together with therein the such journey expenditure as perquisite) doesn’t exceed Rs. 2,00,000. In different phrases, if the gross complete revenue of the worker earlier than together with the taxable medical perquisite on account of journey expenditure exceeds Rs. 2,00,000, the bills on journey of the affected person in addition to of the attendant shall develop into taxable.