RTI on Income Tax Deductions on Medical Reimbursement:
Bro. Amit Gupta filed a RTI applications asking some information on TDS deductions on medical reimbursements. Income Tax authorities have finally replied the queries as below.
Question 1) Information on the actual rules of Income Tax for paying Tax and deducting TDS on;
- a) For reimbursing actual expenses for outdoor Medical treatment to senior citizens
- b) For reimbursing actual expenses for Indoor Medical Treatment to senior citizens
- c) Are such reimbursements as a & b above to the Senior Citizens is considered as taxable income and for which TDS are to be deducted and I Tax is to be paid?
Reply : Yes, according to Union Budget 2018, reimbursement on actual expense for outdoor & Indoor medical treatment to senior citizens is considered as taxable income in respect of employees other than Government employees and for which TDS is to be deducted and Income Tax is to be paid.
Question 2) CGHS is not deducting any TDS. Kindly inform whether the reimbursement received by CGHS beneficiaries on account of 1a & 1b above is a taxable income? Pl note that CGHS is supposed to extend free treatment to its beneficiaries. Question of reimbursement comes only for some specialized treatment or medicines which CGHS cannot provide in house.
Reply: Reimbursement received by CGHS beneficiaries on account of 1(a) & 1(b) above is not a taxable income.
Question 3) BSNL is deducting TDS on the medical reimbursement claims of the pensioners which are ready for payment but not actually paid (only liabilities are created in their system).
- a) Kindly inform the rule of I Tax for such TDS deductions of actually unpaid claims.
- b) How long such claims for which TDS is deducted can be kept pending.
Reply: 3(a) TDS on medical reimbursement claim is deducted on actual payment u/s 192 of IT Act 1961 & Rule 3 of Income Tax Rules, 1962.
3(b) Any person making specified payment mentioned under Income Tax Act are required to deduct TDS at the time of making such specified payment which is to be deposited to the Government by 7th of Subsequent month.
Since this issue relates to the internal practice of the BSNL, Hence this office is unable to give any specific reply.
Question 4) BSNL is deducting TDS for the reimbursement of lifetime contribution paid to CGHS by the pensioners who are migrated to CGHS. Kindly inform the I Tax rule for such TDS deduction.
Reply: Same as mentioned in point 3.