Union Budget 2019 India: We are left with just a few days for the first full budget for the Financial Year 2019-20. From the average taxpayers to tax experts, all are looking at the Union Budget 2019 which will be presented on July 5, 2019 by Finance Minister Nirmala Sitharaman.
We as a society these days follow unhealthy lifestyle, resulting in illness, disability and even death cases. Today, wide changes have occurred in the lifestyle of all people. Lifestyle has a significant influence on physical and mental health of human being. In recent years, even India has witnessed a surge in cases of cancer, diabetes, heart & lung diseases. Millions of people in India succumb to these diseases. As per the National Family Health Survey, only 20% women and 23% men are covered by health insurance in India. Unlike many other countries, India does not have a comprehensive healthcare system for its citizens. Prime Minister Narendra Modi also launched PM Jan Arogya Yojana (PMJAY) earlier, known as Ayushman Bharat National Health Protection Scheme (AB-NHPS). It aims to facilitate healthcare services to over 10 crore families that belong to the urban and rural poor.
Considering the importance of healthcare, the present deductions and exemptions allowed in respect of medical expenditure under the Income-Tax Act are not sufficient. Hence, it becomes necessary for the government to raise tax benefits in respect of medical expenditure incurred by the taxpayers. Section 80D of the Income-Tax Act allows deduction for premium paid for medical insurance. An individual taxpayer can claim deduction in respect of the amount paid for premium on health insurance policy, medical expenses and preventive health checkup.
The maximum deduction allowable under Section 80D is Rs 50,000. Deduction of Rs 25,000 is allowed for self & family and an additional deduction of Rs 25,000 is allowed for insurance of parents. If the parents are senior citizens, then the deduction allowable is Rs 50,000. Further, any sum paid in cash is not allowed as deduction (other than sum paid towards preventive health check-up).
In case of senior citizens, the deduction is allowed for up to Rs 50,000 for incurring medical expenditure also. This deduction isn’t available if any health insurance policy is being taken in the name of such senior citizens.
Though medical expenditure is not defined anywhere in the Act, but going by the motive, medical expenditure should cover every medical expense whether these expenses are covered under any health insurance policy or not. Therefore, one can claim the deduction for all medical expenses such as consultation fees, medicines, hearing aids and so on under Section 80D.
A deduction is also allowed under Section 80DDB to a taxpayer if he incurs expenses on his own medical treatment of specified diseases or ailment or for his dependent family members. The deduction allowable under this section is lower of Rs 40,000 or actual amount paid. In case of medical treatment of senior citizens, the maximum amount of deduction is restricted to Rs 100,000.
While as the deduction under Section 80DDB is allowed for the expenditure incurred on the specified diseases, Section 80D provides deduction for the medical insurance premium and medical expenditure incurred for any disease, whether specified or non-specified. Considering the changes in global climate and lifestyle, there is urgent need to rationale the provisions of Section 80D and Section 80DDB. Medical reimbursement deduction allowable to salaried taxpayers, which was discontinued after introduction of the Standard deduction, needs to re-introduced and the annual limit should be enhanced from Rs 15,000 to Rs 50,000. Given the rising advent of lifestyle diseases in India, the Finance Minister should also think of introducing a new deduction for the medical expenses incurred by a taxpayer.