4 Things You Must Know About Medical Reimbursement

  Author: Abhijit Banerjee

Medical expenses are common expenses that a family has to incur. In case of major health issue, expenses can be very high, but even in normal circumstances a family does incur regular on health related issues. However, if a person is an employee and gets the medical expenses reimbursed from his employer, such an amount may not attract tax to some extent. Here are few things to know about the medical reimbursement.

* Medical reimbursements of up to Rs 15,000 in a financial year are exempt from tax under Section 17(2) of the Income Tax Act, 1961.

* Medical reimbursements should be the actual amount that the employer reimburses to an employee when proof of expenses incurred on medical treatment is submitted by the employee. Only the amount of bills or Rs 15,000, whichever is lower, can be claimed as exemption from tax.

* It can be claimed against the medical expenses incurred on self and family members including spouse, children’s and parents.

* If medical reimbursement is a part of your salary and you don’t claim or submit proof of expenses, any amount received under the head becomes taxable. You will have to pay the taxes according to the applicable income tax slab.

Clearly, along with health insurance plan which provide tax deduction under Section 80D, medical reimbursements go a long way in protecting your family from medical expenses. Tax benefits are the icing to the cake.