Tax Exemption - Medical Allowance for Salaried Personnel

[Asked by Guest]

I joined an organization in June 2014. Medical Allowance in the amount of ₹ 15,000/- is tax exempted annually. Is this applicable to me too OR I get a tax exemption only for ₹ 12,500/- only i.e. 10 months of employment in FY 2014 - 2015 (June 2014 to March 2015). Please advise.

[DR.MARIAPPAN GOVINDARAJAN]

In my opinion ₹ 12,500/- is allowable.

AI Summary

Medical allowance exemption prorated to period of employment; annual exempt limit apportioned based on months worked.
The adviser concludes that the annual medical allowance exemption must be apportioned to the period of employment within the financial year; consequently only the prorated portion corresponding to months worked is allowable.