Medical Allowance

[Guest]

Whether Medical Allowance paid along with the salary is exempt. If yes, please provide me the exemption limit and the Section No.

[CA Rachit Agarwal]

Employers should indicated that the amount is payable for medical treatment, though included in the salary.

Exemption amount Rs. 15000

Section 17(2), Proviso (v)

[rishi mohan]

Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in any hospital maintained by the Government or any local authority or any other hospital approved by the Govern­ment for the purposes of medical treatment of its employees.

Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family however, that such sum does not exceed Rs 15,000/- in the previous year;

AI Summary

Medical allowance exemption applies where employer-paid sums are for medical treatment, subject to statutory limit and conditions. Employer-paid medical allowance included in salary is exempt only if indicated as payable for medical treatment and, where reimbursed, pertains to actual medical expenditure incurred for the employee or family member in government, local authority, or approved hospitals; the exemption is limited by a statutory monetary ceiling and subject to the proviso's conditions.