TDS on Medical out door reimbursement to retired employees - Reg

[CMA VENKATESHAM MUTA]

Sir/Madam,

Employees retired from service and they are getting a pension of ₹ 50,000/- per month from Dept of telecom (DOT), and we , BSNL, reimbursing the medical expenditure to the retired employees approximately 80,000/- per annum. Please clarify

1) Whether BSNL is liable to deduct TDS from the medical reimbursement paid to retired employees.

2) If so, Whether we need to consider the pension amount also for consideration of slab rate for TDS.

Kindly clarify the above please.

AI Summary

TDS on medical reimbursements: outdoor claims above threshold subject to deduction by employer at specified rate.
Practitioner responses indicate that medical reimbursements under CGHS may not attract TDS; indoor treatment paid to empanelled hospitals generally avoids deduction, while outdoor reimbursements exceeding an annual threshold are treated as taxable and the employer making the reimbursement is responsible for deducting TDS, with one contributor citing a ten percent deduction rate. The aggregation of pension with reimbursement for slab purposes was queried but left unresolved; pension may be paid by a separate department while the reimbursing employer handles TDS.