A medical allowance is a fixed allowance given to an employee by an employer as a medical expense. Medical allowance is a hard and fast pay provided by an employer every month. Unlike medical reimbursement, medical allowance is tax-free up to 15,000 per annum.
To get a medical allowance employee doesn’t need to submit any proof regarding medical bills like medical reimbursement. Under the IT Act 1961, medical allowance isn’t categorized as an allowance that bears exemption.
Also, See: Leave Travel Allowance (LTA)
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