Can preventive health checkup be claimed as a separate expense from medical expenses?

Question

I am aware that the salary structure for most employees of corporations in India consists of a section called medical which amounts to 15,000 rs. The implication of this is that employees can get tax relief on medical expenses such as root canals (dental), expenses on medicine, medical tests, etc.

Although, I recently found out the if you get a preventive health checkup done, then you will be reimbursed an amount upto Rs. 5000 for the same.

So here is my confusion. Is the 5000 rs for health checkup over and above the 15,000 rs limit for medical reimbursement? Let's say :

1. I incur a cost of Rs 15,000 as dental expenses.
2. I get a preventive health checkup done for 5000 rs.

Does this mean that I will be reimbursed 9500 rs? Basically, is the following calculation correct?

1. Tax relief on medical expenses = 15,000 * 0.3 (30% tax bracket) = 4500 rs
2. Reimbursement of health checkup expense = 5000 rs.

Total reimbursement to be provided by the employer = 4500 + 5000 = 9500 rs.

Is my understanding correct? Also, does this mean that when I submit the reimbursement form to my company, I should mention 20,000 under medical expenses? (15000 for medical expenses and 5000 for health checkup)

Answer 1

There are 2 different things, As per IT Act, one can get "Medical Reimbursement" upto Rs 15,000 which is tax free. The way it is supposed to work is an employee submits bill and employer will "Reimburse" upto Rs 15,000. So if one does not submit any bills, he does not get any money. If the employer has given the employee Rs 15,000 without any bills, it would have been taxed as per the tax bracket.

In practise all employer factor the Rs 15,000 in the salary to the employee. If bills are submitted, then its tax free. If bill are not submitted, partially submitted, the difference is paid as "Allowance" and hence becomes taxable.

Apart from above there is section 80D that provides additional rebate. Upto Rs 15,000 when health insurance is taken. Upto Rs 5,000 for Health checkup. Hence if you submit the details to your employer you will get rebate in tax, on Rs 5,000 it would be Rs 1,500/-. You would not get "Reimbursement".

I should mention 20,000 under medical expenses

Nope both are under different section as such you should declare these separately.

Answer 2

Deduction for Health Checkup is allowed under Section 80D and is allowed to everyone whether Salaried or Business/Professional.

However, Exemption for Medical Reimbursement of Rs. 15000 is allowed under a different section.

A salaried employee can take benefit of both Medical Reimbursement of Rs. 15,000 as well as Preventive Health Check-up of Rs. 5,000.

Source: Tax Deduction for Health Check-up