How Much Medical Allowance is exempt from tax?



The fixed allowance paid by the employer to the company’s employees monthly (irrespective of bills submission) is known as medical allowance. It is a benefit provided to promote the health of the staff and support medical expenses incurred by the employees in a particular financial year.

How Much:

Previously Income Tax Act allowed tax exemption of up to INR 15,000 on medical reimbursements paid by the employer, but as per the recent amendments total of INR.40,000(Medical Allowances+ Conveyance Allowances) will be tax exempted.

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