Archive · 27 Jul 2025
Can You Get a Refund on TDS from Employee Health Insurance?
If your employer paid for a medical bill and took out taxes, but now the hospital is tax-exempt, you can get that tax money back.
Since the payment is now considered non-taxable, when you file your taxes, don't include that money as part of your income.
You might get questions from tax officials, so keep the hospital's documents handy.
TDS was deducted from health insurance payout due to a delay in the hospital's tax exemption status.
The hospital has since received the tax certificate with retrospective effect, making the reimbursement non-taxable.
The individual seeks a refund of the ₹19,604 TDS deducted from the ₹62,833 reimbursement.
The individual should exclude the non-taxable reimbursement from their salary in Schedule Salary (S) when filing ITR.
Supporting documents, such as the hospital's certificate and bills, should be retained for potential queries.
- Who
- An individual who had TDS deducted from a medical reimbursement.
- What
- Seeking a refund for TDS deducted from a health insurance payout that is now tax-exempt.
- When
- FY 2024-25
- Where
- Not explicitly mentioned, but likely within India.
- Why
- The individual's reimbursement is now considered non-taxable due to the hospital's tax-exempt status being confirmed retrospectively.
Taxpayer
Tax Authorities
Claiming Refund
Taxpayer
Individual seeks to claim refund by excluding reimbursement from income and providing documents if required.
Tax Authorities
Tax authorities may ask queries due to variances in Form 16.
- TDS Amount
- ₹19,604
- Reimbursement Amount
- ₹62,833
- Hospital's Tax Status
- Tax-exempt (retrospective)
- Tax Regime
- New regime (mentioned)
- Applicable Section
- 17(2) of The Income Tax Act, 1961