Reimbursement of medical expenses
Prashant
(Querist) 20 May 2009
This query is : Resolved
I am getting monthly reimbursement of medical to the tune of Rs 1250/- so not exceeding Rs 15000/- p.a. Now my query is can I claim this as an exemption while filing of my return even if I do not produce the medical bills to my employer because since reimbursement of medical is taxable under FBT upto Rs 15000/- and over and above Rs 15000/- is taxable in the hands of employee. So when upto 15000/- it is liable for FBT do I have to produce the medical bills to company to claim exemption or simple declaration is sufficient. Suppose if I dont produce the bills still will it be taxed in my hands as well as taxed under FBT.
Thanks in advance
A V Vishal
(Expert) 20 May 2009
Dear Prasant,
Some employers to save TDS deduction of the employee are resorting to such dubious reimbursements, the law says that any medical allowance is taxable perquisite, whereas reimbursement is not taxable, hence, the same is termed as a reimbursement rather than an allowance. The duty of keeping record of the medical bills lies with the employer, in case the employee is summoned by the deptt for assessment, he has to produce necessary evidence in support of his claim, incase, he fails to do so, the Assessing officer has every right to add back such claim to the income and re-compute the tax liability. Further, interest will be charged under S.234 on the arrears of tax if any.
