I am working in a PSU and I had already declared my parents as my dependents when I joined this company. Recently, my father was hospitalized for multiple organ failure. I had to borrow a significant amount of money from my family members and friends for his treatment. I submitted all the receipts and medical bills incurred during his medical treatment in my office. My company paid 3.5 lakhs as a medical advance after submitting all the bills. According to the company's policy, each employee is entitled to apply for medical reimbursement for amounts up to 10 lakhs in a financial year. The financial year is coming to an end, and my company is including that medical advance in my CTC to deduct tax. Is there any way I can avoid tax calculations since the money I spent on my father's illness is a debt? I am already in significant debt, so please help me with this issue.
From India, Secunderabad
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1From India, Secunderabad
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In PSUs, medical reimbursements are not part of income and hence not taxable to the employees. Discuss with your HR. Pon
From India, Lucknow
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From India, Lucknow
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Here they are saying that medical reimbursements are tax-deductible and will be included in your CTC.
Sir, can you provide/refer to any document or any government policy where it is stated that in PSUs medical reimbursements are not part of income.
From India, Secunderabad
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Sir, can you provide/refer to any document or any government policy where it is stated that in PSUs medical reimbursements are not part of income.
From India, Secunderabad
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Dear Amar Singh,
Section 17 (2) of the Income Tax Act, 1961 covers the inclusion of perquisites in taxable salary and also details the expenses that can be excluded i.e., not treated as taxable income
An extract of Section 17(2) is appended
QUOTE
Perquisite includes
Provided that nothing in this clause shall apply to,
(i) The value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer;
(ii) Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family (a) In any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees; (b) In respect of the prescribed diseases or ailments in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines:
Provided that, in a case falling in sub-clause (b), the employee shall attach with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital;
(iii) Any portion of the premium paid by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee under any scheme approved by the Central Government for the purposes of clause (ib) of sub-section (1) of section 36;
(iv) Any sum paid by the employer in respect of any premium paid by the employee to effect or to keep in force an insurance on his health or the health of any member of his family under any scheme approved by the Central Government for the purposes of section 80D;
UNQUOTE
For your information, I am attaching the following two documents:
1. An extract from an Income Tax Circular dated 25th September, 2012 issued by Power Grid Corporation in respect of how they treat valuation of perquisites in respect of Medical Reimbursement for their employees.
2. A more recent Circular dated 20th March 2013 issued by ONGC in respect of Income Tax perquisite in respect of Medical Treatment provided to Employees.
I hope that these would enable you to have a dialogue with your company.
Regards
Raju Bhatnagar
From India, Bangalore
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Section 17 (2) of the Income Tax Act, 1961 covers the inclusion of perquisites in taxable salary and also details the expenses that can be excluded i.e., not treated as taxable income
An extract of Section 17(2) is appended
QUOTE
Perquisite includes
Provided that nothing in this clause shall apply to,
(i) The value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer;
(ii) Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family (a) In any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees; (b) In respect of the prescribed diseases or ailments in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines:
Provided that, in a case falling in sub-clause (b), the employee shall attach with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital;
(iii) Any portion of the premium paid by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee under any scheme approved by the Central Government for the purposes of clause (ib) of sub-section (1) of section 36;
(iv) Any sum paid by the employer in respect of any premium paid by the employee to effect or to keep in force an insurance on his health or the health of any member of his family under any scheme approved by the Central Government for the purposes of section 80D;
UNQUOTE
For your information, I am attaching the following two documents:
1. An extract from an Income Tax Circular dated 25th September, 2012 issued by Power Grid Corporation in respect of how they treat valuation of perquisites in respect of Medical Reimbursement for their employees.
2. A more recent Circular dated 20th March 2013 issued by ONGC in respect of Income Tax perquisite in respect of Medical Treatment provided to Employees.
I hope that these would enable you to have a dialogue with your company.
Regards
Raju Bhatnagar
From India, Bangalore
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CTC concept is not prevalent in PSUs. — — — — — — — — — — — — — — — — - Pon
From India, Lucknow
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From India, Lucknow
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Dear Mr. Amar,
You will get an exemption limit of up to Rs. 15,000/- in a year for medical bills reimbursed. Any amount in excess will be added back and treated as taxable income, with income tax computed accordingly along with other salary income.
For further details on the subject, you can refer to the discussion provided in the following link: https://www.citehr.com/53734-medical...ny-policy.html.
For more clarity on the subject, please review the attached notes.
Thank you.
From India, Bangalore
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You will get an exemption limit of up to Rs. 15,000/- in a year for medical bills reimbursed. Any amount in excess will be added back and treated as taxable income, with income tax computed accordingly along with other salary income.
For further details on the subject, you can refer to the discussion provided in the following link: https://www.citehr.com/53734-medical...ny-policy.html.
For more clarity on the subject, please review the attached notes.
Thank you.
From India, Bangalore
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Dear friend,
Also note these for your IT purposes:
TAX FREE PERKS U/S 17(2):
Medical benefits provided by the employer in their hospitals/clinics.
Tea and snacks or free food or beverages provided in office or factory or through paid vouchers which are not transferable and usable only at eating joints
Facilities of motor cars
Residential accommodation provided at site
Facilities of club or health club and similar facilities
Expenses on telephone including mobile phones
Employers contribution to staff group insurance scheme
Scholarship to employees or their children paid by the employer
Conveyance facilities
Refresher courses
Facility of guest house or holiday home
Entertainment expenses
Free ration to Armed Forces Personnel
Perquisites to government employees posted abroad
Certain perquisites to High Court and Supreme Court Judges
Rent free houses to certain persons
Laptop and computers provide by the employer for personal use of employee
Interest free or concessional loan if the aggregate dose not exceed 20000 in PY
Periodicals and journals required for discharge of work
Leave travel concessions as per terms and conditions
Modified Provisions:
Holiday facilities-Sec.3(7)(ii)
Free food- Sec.3(7)(iii)
Gifts - Sec.3(7)(iv)
Credit card facilities Sec.3(7)(v)
Club facilities- Sec.3(7)(vi)
From India, Bangalore
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Also note these for your IT purposes:
TAX FREE PERKS U/S 17(2):
Medical benefits provided by the employer in their hospitals/clinics.
Tea and snacks or free food or beverages provided in office or factory or through paid vouchers which are not transferable and usable only at eating joints
Facilities of motor cars
Residential accommodation provided at site
Facilities of club or health club and similar facilities
Expenses on telephone including mobile phones
Employers contribution to staff group insurance scheme
Scholarship to employees or their children paid by the employer
Conveyance facilities
Refresher courses
Facility of guest house or holiday home
Entertainment expenses
Free ration to Armed Forces Personnel
Perquisites to government employees posted abroad
Certain perquisites to High Court and Supreme Court Judges
Rent free houses to certain persons
Laptop and computers provide by the employer for personal use of employee
Interest free or concessional loan if the aggregate dose not exceed 20000 in PY
Periodicals and journals required for discharge of work
Leave travel concessions as per terms and conditions
Modified Provisions:
Holiday facilities-Sec.3(7)(ii)
Free food- Sec.3(7)(iii)
Gifts - Sec.3(7)(iv)
Credit card facilities Sec.3(7)(v)
Club facilities- Sec.3(7)(vi)
From India, Bangalore
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Dear,
I am also employed in a PSU. Be assured and confident that reimbursement of medical expenses is not a taxable component either in a PSU or a private company. Please refer to Sec. 17 of the Income Tax Act. In literal terms, only incomes are taxable, not reimbursements of expenses like medical and traveling expenses. Reimbursements are provided against the production of bills; hence, they are not considered as income and are therefore not taxable. It's as simple as that. Where there is a provision for the payment of Medical Allowance, irrespective of expenses made or not, it is taxable.
AK Jain
From India, New+Delhi
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I am also employed in a PSU. Be assured and confident that reimbursement of medical expenses is not a taxable component either in a PSU or a private company. Please refer to Sec. 17 of the Income Tax Act. In literal terms, only incomes are taxable, not reimbursements of expenses like medical and traveling expenses. Reimbursements are provided against the production of bills; hence, they are not considered as income and are therefore not taxable. It's as simple as that. Where there is a provision for the payment of Medical Allowance, irrespective of expenses made or not, it is taxable.
AK Jain
From India, New+Delhi
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I am a banker.
Please let me know how income tax authorities ensure that a hospital is approved by the government. Which certificate does it require from the hospital to prove government approval?
If I have been treated in a government-approved hospital but have bought medicine from the market based on the hospital's prescription, can I still claim tax exemption even if I did not pay for the treatment in the hospital approved under rule 3a for the medicine?
If I am being treated for an illness not covered under rule 3a or if I am receiving treatment from a private hospital, can I still get tax exemption?
I believe the law needs clarification. There is a necessity to amend the law. Specific doctors should also be identified from whom receiving treatment should be tax-free, which would honor the doctors since the treatment is provided by the doctor and not the hospital.
My proposal is for us to come together and draft a medical tax exemption document with appropriate amendments for the government for the benefit of the employees.
If you find anything incorrect, I apologize for the error.
Regards
From India, Delhi
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Please let me know how income tax authorities ensure that a hospital is approved by the government. Which certificate does it require from the hospital to prove government approval?
If I have been treated in a government-approved hospital but have bought medicine from the market based on the hospital's prescription, can I still claim tax exemption even if I did not pay for the treatment in the hospital approved under rule 3a for the medicine?
If I am being treated for an illness not covered under rule 3a or if I am receiving treatment from a private hospital, can I still get tax exemption?
I believe the law needs clarification. There is a necessity to amend the law. Specific doctors should also be identified from whom receiving treatment should be tax-free, which would honor the doctors since the treatment is provided by the doctor and not the hospital.
My proposal is for us to come together and draft a medical tax exemption document with appropriate amendments for the government for the benefit of the employees.
If you find anything incorrect, I apologize for the error.
Regards
From India, Delhi
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No Income Tax on Medical Reimbursement up to Rs. 15,000
Please refer to this link, it will provide clarification on several doubtful points. The author has nicely addressed our doubts. Medical expenditure reimbursed is non-taxable subject to certain conditions. Rule 3A of IT rules may also be referred to in this context.
From India, Pune
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Please refer to this link, it will provide clarification on several doubtful points. The author has nicely addressed our doubts. Medical expenditure reimbursed is non-taxable subject to certain conditions. Rule 3A of IT rules may also be referred to in this context.
From India, Pune
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Medical Facts.pdf
Few Medical info.doc