Whether TDS is deducted from hospitalization bills reimbursed by employer

[Asked by Guest]

Dear Sir,

The husband of a lady met with an accident and was comatose for three months due to severe head injury, after which he died. The wife of this person is an employee of State Bank of India. The medical bill was reimbursed by the employer (SBI) to the employee (lady in question). The question is, whether the bill amount will attract TDS under Indian Tax laws.

AI Summary

Taxability of employer reimbursed medical expenses: exemption up to statutory limit, excess treated as perquisite and subject to TDS.
Employer payments for an employee's medical treatment are treated as salary; when the employee submits proof, reimbursement up to the statutory medical exclusion is excluded from salary, but any excess is taxable as a perquisite and subject to TDS. If no proof is produced, the whole reimbursement is treated as a perquisite. The exclusion must be applied taking into account prior utilisation in the fiscal year before calculating TDS obligations.