Athira Sethu
Kochi, 17 June 2026
The clarification came forth from the CBDT on the issue of Central Government pensioners being doubly taxed for medical reimbursements.
This matter was deliberated upon at the meeting of the 35th Standing Committee of Voluntary Agencies (SCOVA). Pensioners were concerned about the fact that along with their pension payments, their medical reimbursement was also subjected to taxes. They sought the intervention of the government to stop this double taxation.
Upon deliberation of the issue, CBDT clarified that there is no question of double taxation here.
As per the CBDT, while pension and medical reimbursement both come into picture but they remain distinct from each other. Pension amounts qualify as income and fall into the bracket of “Salary” as per the income tax law. However, the medical reimbursement amount does not come into the category of pension.
Medical reimbursement is a supplementary benefit to the pension amount and comes handy for any medical purposes.
It was also observed by the CBDT that in cases where the employer pays actual medical expenses to the employee or even any family member, it does not constitute any taxable benefit. This is equally applicable to pensioners.
It was stated by the department that the medical reimbursement amount is an amount that is paid along with the basic pension. Since it is different from the basic income and is intended to meet medical expenses, it cannot be regarded as double taxation.
According to the CBDT, the reimbursement amount is nothing but an additional benefit paid to the pensioner apart from the basic income and cannot be termed as double taxation.
Further references were made to the relevant section of the Income Tax Act, according to which payments of actual medical expenditure do not constitute any perquisites.
On the basis of the clarifications given by the CBDT, it can be said that there was no problem of double taxation in this case. Hence, the issue got sorted out and nothing else had to be done in this regard.
The clarification provided above has helped many pensioners who were worried about their medical reimbursement payment. According to the CBDT, both pensions and medical reimbursement payments are separate payments, and hence, there is no double taxation in the case of medical reimbursement payments by pensioners.
