Public expectations on the upcoming budget are high and citizens would be hoping for a budget that is populist in nature. Already speculations are running rife whether the tax slabs would be revised and if the limit would be raised to Rs 3 lakh from Rs 2.5 lakh. The wishlist of the tax payers also include one very pertinent and pressing issue - that of medical reimbursement. Tax payers are hoping the limit would be increased significantly.
Medical reimbursements are payments made to employees against specific medical bills submitted to the employer. Employees can claim tax benefit on medical bills provided by them, according to the Income Tax Act 1961. The amount of Rs 15,000 was set in effect from April, 1999 that is almost 20 years ago.
It essentially means that even if one has medical expenditure of more than Rs 15,000, upon producing the bills, the individual will only be reimbursed with that amount.
The amount of Rs 15,000 might have been significant in 1999 but medical costs have skyrocketed in the past two decades. The amount is not only of little consequence today but is also impractical in this age.
In 2013, an Assocham survey found that 89 per cent of respondents wanted the medical reimbursement limit to be increased to Rs 50,000. A similar number of respondents raised the same demand in a 2016 survey by the body.
However, in an interview with Economic Times, Sonu Iyer, tax partner and people advisory services leader at Ernst and Young told the newspaper that although there is a case for increasing these limits, she does not think that it is going to happen.
Nevertheless, since it is the last regular budget for the Modi government, tax payers have reason to hope that the Finance Minister would acquiesce with their very reasonable demand.