Hi,
Can somebody assist me with information regarding Medical allowance incompliance to labour law.
What is the ceiling salary in terms of gross or CTC or net to add this component in the salary break up.
Secondly, if we have this component in the salary is it mandatory to collect bills or depends on the tax liability.
Your assitance in this regard shall be helpful - Thanks you.
Regards,
unknown.
From India, Hyderabad
Can somebody assist me with information regarding Medical allowance incompliance to labour law.
What is the ceiling salary in terms of gross or CTC or net to add this component in the salary break up.
Secondly, if we have this component in the salary is it mandatory to collect bills or depends on the tax liability.
Your assitance in this regard shall be helpful - Thanks you.
Regards,
unknown.
From India, Hyderabad
Labour Law is silent about payment of medical allowance. It is purely a matter of the respective company's policy whether to give medical allowance or not. If such allowance is given, the company can insist upon production of bills in original. However, if such allowance is part of CTC, there is no meaning in demanding bills from the employees because, such payment is prefixed as forming part of monthly salary.
For Income Tax purpose, invariably, payment should be supported by bills and the maximum amount allowed as deduction is Rs 15000 per annum.
Regards,
Madhu.T.K
From India, Kannur
4249For Income Tax purpose, invariably, payment should be supported by bills and the maximum amount allowed as deduction is Rs 15000 per annum.
Regards,
Madhu.T.K
From India, Kannur
Hi,
I appreciate your assistance and acknowledgement in this regard. On one statement of your's I would like to have further clarification.
"However, if such allowance is part of CTC, there is no meaning in demanding bills from the employees because, such payment is prefixed as forming part of monthly salary."
When we say the above, then i guess the component becomes taxable unless the bills are produced ( taken the fact that salary falls under the tax bracket), and if it is so, then there is isnt a need to imply this element in the salary structure. - Pls clarify - Thank you!
Thanks for your support.
Regards,
unknown.
From India, Hyderabad
I appreciate your assistance and acknowledgement in this regard. On one statement of your's I would like to have further clarification.
"However, if such allowance is part of CTC, there is no meaning in demanding bills from the employees because, such payment is prefixed as forming part of monthly salary."
When we say the above, then i guess the component becomes taxable unless the bills are produced ( taken the fact that salary falls under the tax bracket), and if it is so, then there is isnt a need to imply this element in the salary structure. - Pls clarify - Thank you!
Thanks for your support.
Regards,
unknown.
From India, Hyderabad
CTC is prefixed and includes all costs to company besides salary. An employee is accepting the offer on the basis all the elements like, basic salary, HRA, Conveyance, medical allowance, mobile phone reimbursements, the employer's contribution to EPF, the cost the employer may have to incur after five years by way of gratuity and what all stupid things which the employer wants to add so that the total sum OFFERED shall be attractive.
Certainly, there is a basic difference between allowance and reimbursement of a certain expense met. Allowance is pre fixed and will not vary whereas reimbursement is not prefixed and shall vary. For example, if Rs 1500 is fixed as Medical Allowance, that is payable without producing any proof that the employee has spent the amount. But if it is medical reimbursement subject to a maximum of a fixed sum or say, limited to the basic pay per annum, the employee is expected to produce bills in support to claim the amount.
In CTC agreement, the medical allowance is usually shown as part of CTC, that means it is fixed and decided in advance before hiring an employee and in the same footing the employee has accepted the offer of employment on the faith that he will get it as part of his earning. As such, there is no meaning in demanding bills in order to release this amount. Of course, if he produces bills, he can get exemption u/s 80C of Income Tax subject to Rs 15000. That is different treatment because, if the employee says that he is ready to pay tax for the amount can the employer refuse?. No.
Madhu.T.K
From India, Kannur
Certainly, there is a basic difference between allowance and reimbursement of a certain expense met. Allowance is pre fixed and will not vary whereas reimbursement is not prefixed and shall vary. For example, if Rs 1500 is fixed as Medical Allowance, that is payable without producing any proof that the employee has spent the amount. But if it is medical reimbursement subject to a maximum of a fixed sum or say, limited to the basic pay per annum, the employee is expected to produce bills in support to claim the amount.
In CTC agreement, the medical allowance is usually shown as part of CTC, that means it is fixed and decided in advance before hiring an employee and in the same footing the employee has accepted the offer of employment on the faith that he will get it as part of his earning. As such, there is no meaning in demanding bills in order to release this amount. Of course, if he produces bills, he can get exemption u/s 80C of Income Tax subject to Rs 15000. That is different treatment because, if the employee says that he is ready to pay tax for the amount can the employer refuse?. No.
Madhu.T.K
From India, Kannur
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