Hi
Would you please let me know what is the cut off amount of paying conveyance / LTA Allowance and Medical Allowance to employees per annum according to New Income Tax Rule introduced now?
Above which level would it be taxable for employers?
Regards
Anu
From India, Pune
22Would you please let me know what is the cut off amount of paying conveyance / LTA Allowance and Medical Allowance to employees per annum according to New Income Tax Rule introduced now?
Above which level would it be taxable for employers?
Regards
Anu
From India, Pune
Hi Anu,
Nice to see your posts after a long time..
Conveyance - Rs 800/ pm or Rs 9,600/-p.a.
Medical Allowance or rather Reimbursement- Rs 15,000/- p.a.
LTA - as per the rules..please check the section under C&B or do quick search on detailed explanation on LTA...
According to FBT the medical allowance may come under its purview ..the detailed gazette is awaited.
Cheers,
Rajat
Ps: It;s great in Pune after a long time..on a holiday n wud be back in office on Wednesday :(
From India, Pune
Nice to see your posts after a long time..
Conveyance - Rs 800/ pm or Rs 9,600/-p.a.
Medical Allowance or rather Reimbursement- Rs 15,000/- p.a.
LTA - as per the rules..please check the section under C&B or do quick search on detailed explanation on LTA...
According to FBT the medical allowance may come under its purview ..the detailed gazette is awaited.
Cheers,
Rajat
Ps: It;s great in Pune after a long time..on a holiday n wud be back in office on Wednesday :(
From India, Pune
Hi Umalme, If Medical Reimbursement exceeds Rs 15,000/- , company/individual have to pay FBT on the same. In this case employees are produce the bills.. Regards, Rajat
From India, Pune
From India, Pune
hi Rajat,
I am in doubt about this. According to me, if the medical reimbursement exceeds Rs. 15,000/-, the excess over Rs. 15,000 is taxable as a perquisite in the employee's hands.
Under the new circular, which I think has not yet been brought into effect, the reimbursements upto 15,000 is taxable under FBT for the employer.
Good to see you back in action.... :D
Warm regards,
Devjit
From India, Gurgaon
I am in doubt about this. According to me, if the medical reimbursement exceeds Rs. 15,000/-, the excess over Rs. 15,000 is taxable as a perquisite in the employee's hands.
Under the new circular, which I think has not yet been brought into effect, the reimbursements upto 15,000 is taxable under FBT for the employer.
Good to see you back in action.... :D
Warm regards,
Devjit
From India, Gurgaon
Hi All,
Medical reimbursement is prima facie treated as perquisite taxable under Section 17(2) of the I-T Act.
At present, if any sum is paid by the employer for expenditure actually incurred by the employee for medical treatment in an unapproved hospital and it exceeds Rs 15,000 during the year, such sum is termed`salary' as defined in Clause (1) of Section 17 of the Income-Tax Act and is liable to income-tax in the hands of the employee. There is no change in this position. Since such sum is taxable in the hands of the employee, the same is not liable to FBT.
However, if any sum is paid by the employer for expenditure actually incurred by the employee for medical treatment in an unapproved hospital and it does not exceed Rs 15,000 during the year, such sum does not fall within the meaning of `salary' as defined in Clause (1) of Section 17 of the Income-Tax Act and not liable to income-tax in the hands of the employee. There is no change in this position. Since such sum is not taxable in the hands of the employee, the same is liable to FBT."
Basically the circular has gone on the premise that FBT is applicable if an employee is not exposed to perquisite taxation.
Hence, up to Rs 15,000 is exempt in the hands of the employee and, therefore, FBT will arise. On the excess portion, as the employee is liable to pay income-tax, FBT will not arise.
Since, it is taxable in the hands of the employees, the question of applicability of FBT should not arise.
In the case of medical reimbursement, employees are liable to pay income-tax as perquisite subject to monetary limits of exemption.
Rahul
09968270580
From India, New Delhi
Medical reimbursement is prima facie treated as perquisite taxable under Section 17(2) of the I-T Act.
At present, if any sum is paid by the employer for expenditure actually incurred by the employee for medical treatment in an unapproved hospital and it exceeds Rs 15,000 during the year, such sum is termed`salary' as defined in Clause (1) of Section 17 of the Income-Tax Act and is liable to income-tax in the hands of the employee. There is no change in this position. Since such sum is taxable in the hands of the employee, the same is not liable to FBT.
However, if any sum is paid by the employer for expenditure actually incurred by the employee for medical treatment in an unapproved hospital and it does not exceed Rs 15,000 during the year, such sum does not fall within the meaning of `salary' as defined in Clause (1) of Section 17 of the Income-Tax Act and not liable to income-tax in the hands of the employee. There is no change in this position. Since such sum is not taxable in the hands of the employee, the same is liable to FBT."
Basically the circular has gone on the premise that FBT is applicable if an employee is not exposed to perquisite taxation.
Hence, up to Rs 15,000 is exempt in the hands of the employee and, therefore, FBT will arise. On the excess portion, as the employee is liable to pay income-tax, FBT will not arise.
Since, it is taxable in the hands of the employees, the question of applicability of FBT should not arise.
In the case of medical reimbursement, employees are liable to pay income-tax as perquisite subject to monetary limits of exemption.
Rahul
09968270580
From India, New Delhi
I am getting Medical allowance from company on monthly basis amount of Rs.1250 P.M and 15000 P.A. But i dont have bill for the same. So please confirm i have to pay tax or not.
From India, Mumbai
From India, Mumbai
Hi Rahul,
Thanks for sharing the information. I would like to know that is there any percentage decided for Medical allowance For eg. I have only Basic (35a% OF ctc), HRA (50% of basic), Conveyance(1600), Medical allowance 1250. Now in case i want to increase this component to match the CTC amount, so is there any norm set in the from of percentage of basic or is it like we are free to decide on the medical allowance amount.
Also, I guess, Special allowance can be given out up to 110% of basic.
Please help.
Regards,
Madhuri
From India, undefined
Thanks for sharing the information. I would like to know that is there any percentage decided for Medical allowance For eg. I have only Basic (35a% OF ctc), HRA (50% of basic), Conveyance(1600), Medical allowance 1250. Now in case i want to increase this component to match the CTC amount, so is there any norm set in the from of percentage of basic or is it like we are free to decide on the medical allowance amount.
Also, I guess, Special allowance can be given out up to 110% of basic.
Please help.
Regards,
Madhuri
From India, undefined
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