TaxTMI 
TaxTMI 
TaxTMI 
Medical Allowance
CHITRA RAGURAM
Whether Medical Allowance paid along with the salary is exempt. If yes, please provide me the exemption limit and the Section No.
Medical Allowance Tax Exemption: Up to Rs. 15,000 for Treatment Under Section 17(2), Proviso (v) of Income Tax Act. A discussion on a forum addressed whether medical allowance paid with salary is tax-exempt. Two replies clarified that medical allowance is exempt up to Rs. 15,000 if it is for medical treatment and the employer specifies this. The exemption falls under Section 17(2), Proviso (v) of the Income Tax Act. For the exemption to apply, the expenses must be incurred by the employee for their own medical treatment or that of a family member in a government or approved hospital. (AI Summary)