Medical Reimbursement & Reimbursement of Mediclaim Insurance to Employees

Q & A ForumCategory: Financial PlanningMedical Reimbursement & Reimbursement of Mediclaim Insurance to Employees
Dipen asked 8 years ago
As an employer, i want to provide BOTH reimbursement of medical bills upto Rs.15,000/- p.a., AS WELL AS  reimbursement of mediclaim insurance purchased by the employees. While medical bill reimbursement upto Rs.15,000/- p.a. is exempt from tax in the hands of employees, there is no exemption limit mentioned for reimbursement of mediclaim insurance purchased by the employees, as per below text taken from Income Tax website. "2) Medical insurance premium paid or reimbursed by the employer is not chargeable to tax. 3) Any other expenditure incurred or reimbursed by the employer for providing medical facility in India is not chargeable to tax up to Rs.15,000 in aggregate per assessment year." So the queries are : 1) Will reimbursement of mediclaim insurance to employee is separately exempted in the hands of employee, apart from medical bill reimbursement ? If yes, is there any ceiling amount for such exemption ? 2) Since the Mediclaim Insurance is purchased by the employee and reimbursed by the employer, can the employee claim its deduction under section 80 D ? 3) Can i PAY a fix monthly amount for both these items i.e. medical bill reimbursement Rs.1,250 p.m. and mediclaim insurance reimbursement Rs.2,000 p.m., in the employee's monthly salary slip and decide the employee's actual tax liability on yearly basis, based on actual bills submitted and mediclaim insurance paid by employee during the financial year ? Regards
3 Answers
Sreekanth Staff answered 8 years ago
Hi, Suggest you to kindly go through below article, can be useful to you; https://www.relakhs.com/mediclaim-insurance-tax-section-80d/
Dipen replied 8 years ago

Dear Sir,
I had already gone through the article before posting the query, but was still confused. Hence, request you to reply to my specific queries.
Regards

Sreekanth Staff answered 8 years ago
Hi, 1 & 2 - If an employer provides medical insurance facility to employees then it is termed as GROUP INSURANCE cover.  If employer pays any insurance premium on behalf of his employee then it will be regarded as income of the employee and it will be added in the gross salary as perquisite U/s 17(2)(V) . however the following two insurance premium paid by the employer on behalf of employee shall not be taxable for employee: a) Medical Insurance Premium; b) Personal Accident Insurance Premium. 


For CTC it will be added as it is paid by employer . For IT purposes it is included as part of salary and since it is exempt it is deducted.

The company can claim deduction as an expense.

Suggest you to kindly consult a CA.  
Dipen replied 8 years ago

Dear Sir,
Thank you very much.
Only 2 questions : (i) In form 16, such reimbursement of medical insurance to employee by employer will get deducted under which section ? (ii) Pl. throw light on my 3rd query.
Regards

Sreekanth Staff answered 8 years ago
Hi, The treatment of medical insurance premium paid by employer depends on how it is paid/deducted. In case, if group insurance premium is deducted from employee's salary then he/she can claim it under section 80D. 3 - Yes, you may do so.   As these queries are employer's viewpoint, kindly consult a CA, they are the right professional to provide further guidance to you in this regard.
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