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Covid-19 treatment may qualify for tax deduction benefits
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SME Times News Bureau | 08 Jan, 2021
Continuing with its pandemic relief initiatives, the
government may extend income tax deduction benefits for Covid-19
treatment to individuals not covered under any health insurance.
Sources
said that several pre-budget proposals for providing tax relief for
Covid-19 treatment have come to the Revenue Department and these are
being actively examined. If the proposal is accepted, it may form part
of budget proposals for 2021-22, they added.
Currently, few
deductions have been prescribed under Chapter VI-A of the Income Tax
Act, 1961 for medical treatment for self or dependent suffering from
disability/severe disability (Sections 80DD, 80U), and medical treatment
of prescribed diseases and ailments (Section 80DDB). However, there is
no specific deduction under the Act which covers treatment cost for
Covid-19 patients who are not covered under any health insurance.
The
proposal that is now being considered is to include expenses made on
Covid-19 treatment under the prescribed diseases category as per Section
80DDB and therefore, qualify such expenditure for getting income tax
deduction benefits.
Interestingly, donation made to PM CARES
fund designed specifically for providing Covid-19 relief is currently
eligible for 100 per cent deduction under Section 80G of the Act, but no
corresponding deduction has been notified for expenses incurred on
treatment of the disease itself.
"Given the substantial cost
involved in Covid-19 treatment in Government or private hospitals, a
separate deduction capped up to Rs 1,00,000 or actual treatment cost
incurred by the taxpayer for self or family, whichever is lower, may be
considered to be introduced under the Act to provide much-needed relief
to the taxpayers specially when such costs are not covered under a
health insurance policy," said Parizad Sirwalla, partner and head,
global mobility services-tax, KPMG Assurance and Consulting LLP India.
The
inclusion of Covid-19 treatment for tax deduction would bring big
benefits to individuals and their families who are not covered under any
health insurance plan but still face this unwanted additional financial
burden from the pandemic. Even with health insurance, several policies
have not included cover for Covid-19 treatment. Such individuals would
also benefit from I-T deduction if it is made available.
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