Medical Allowance Calculator
Calculate tax-exempt medical reimbursement and allowance
Medical Allowance Breakdown
Detailed Calculation
Recommendation
Your medical allowance is fully tax-exempt as your bills exceed the allowance amount.
Understanding Medical Allowance
What is Medical Allowance?
Medical allowance is a fixed amount paid by employers to employees to cover medical expenses. It is typically a part of the salary structure and is subject to tax rules.
Tax Treatment
Medical allowance is taxable under the head "Income from Salary". However, you can claim exemption under Section 17(2) of the Income Tax Act for actual medical expenses incurred.
Exemption Rules
- Exemption is limited to ₹15,000 per year under old tax regime
- No specific exemption under new tax regime (standard deduction applies)
- Exemption = Lower of (Medical Allowance, Actual Medical Bills)
- Bills must be for self, spouse, children, parents, or dependent siblings
Important Points
Keep all medical bills and prescriptions for tax audit purposes.
Claims are for expenses incurred during the financial year (Apr-Mar).
Doctor fees, medicines, hospital charges, diagnostic tests, etc.
Calculation Formula
Frequently Asked Questions
What is the maximum medical allowance exemption limit?
Under the old tax regime, the maximum exemption is ₹15,000 per financial year. Under the new tax regime, there is no specific medical allowance exemption, but you get a standard deduction of ₹50,000.
Do I need to submit bills for medical allowance?
Yes, you need to submit actual medical bills and prescriptions to your employer to claim tax exemption. Keep all bills for at least 6 years for tax audit purposes.
Can I claim medical allowance for family members?
Yes, you can claim medical expenses for yourself, your spouse, children, dependent parents, and dependent brothers/sisters.
Is medical allowance different from medical insurance?
Yes, medical allowance is part of your salary for medical expenses, while medical insurance premium deduction is under Section 80D (up to ₹25,000/₹50,000).