My employer gives me medical cover under a group insurance scheme. The insurer reimbursed a claim for an expense of Rs 40,000 incurred by me for my mother’s surgery by depositing the amount in my salary account. Will this money be added to my total income? Is it taxable?Claims under medical policies are of the nature of reimbursement of expenditure already incurred by the policyholder. Since medical insurance is a contract of indemnity and there is no profit element in the claim received by the insured, it is not taxable in his hands. Thus, the medical expense reimbursement credited in your salary account will not be included in your total income for tax purposes.
