Medical Allowance - Tax Treatment
Wednesday, April 3, 2013
According to Clause 139 of part 1 (Exemption from total income) of 2nd Schedule of Income Tax Ordinance, 2001
a) If Medical Facility or reimbursement of actual Medical expenses is provided:
- in accordance with terms of employment: The amount provided is fully exempt if NTN of medical practitioner and employer's attestation are available.
- Not in accordance with terms of employment: The amount provided is fully taxable
b) Medical Allowance provided: Tax Treatment is exempt upto 10% of Basic Salary
c) Medical allowance is provided in addition to medical facility or reimbursement in accordance with the terms: Tax Treatment is Medical allowance fully taxable and Facility / reimbursement is Fully Exempt if NTN of medical practitioner and employer's attestation are available.
d) Medical allowance is provided in addition to medical facility or reimbursement but NOT in accordance with the terms: Tax Treatment is Medical allowance is exempt upto 10 % of Basic Salary and Facility / reimbursement is Fully taxable.
Ref: Income Tax Ordinance, 2001
Labels: Medical Allowance, Salary income, Taxation
posted @ 10:56 AM,
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