Sunday, August 21, 2016

Medical Reimbursement

Many companies allow employees to submit their medical bills and reimburse the expense incurred by them. Some companies even have tie-ups with hospitals and clinics where the employees can get medical treatments done and then reimburse the expenses. It is this reimbursable amount, submitted to the employer with bills and receipts, which is tax-free. Key points are:

.You can claim tax exemption only up to Rs.15,000 per year.

If you have spent more than Rs.15,000, the excess amount is taxable (even if the company reimburses the excess amount). If you have spent less than Rs.15,000 then only the incurred expense is tax-free. E.g. if your medical expense in a year, with supporting bills, was Rs.9,000, you will get a tax exemption of Rs.9,000 only out of the Rs.15,000 allowed.

If you do not produce any medical bills to support your claim for reimbursement, the entire Rs.15,000 is taxable.

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