The two things you can’t avoid in life are death and taxes, or so the common saying goes. Upon reflection, we can see the truth of this statement. For taxes, the Modi government and Finance Minister Arun Jaitley are taking strides in enforcing stringent measures to reduce tax evasion and make sure people are filing taxes. The other point of death is something no one can avoid. However, we can ensure we live a healthy and happy life with the time given to us. Combine death and taxes, and we can decipher if improvements can be made by FM Arun Jaitley to the current health/medical deduction u/s 80D and 80DDB in the Budget 2018.
1. Section 80D/80DDB: At present the deduction on health insurance premiums taken by a taxpayer u/s 80D for him/herself, spouse, children and parents (senior and super senior citizens (above 80 yrs)) is Rs 25,000 and Rs 30,000 for seniors. This deduction also allows Rs 5,000 for preventive health checkups undertaken. So, theoretically an individual can avail of a maximum deduction of Rs 60,000.
With today’s fast-paced lifestyle, many people seek out medical treatments, tests, diagnostics to maintain their health. Living a healthy lifestyle is an increasing trend in the country, as living and working cultures change. Therefore, it is plausible to increase the preventive allowance of Rs 5,000 up to the maximum limit of Rs 25,000 and Rs 30,000, respectively, in the Budget 2018. Moreover, with spa treatments, physiotherapies, yoga and gym membership costs increasing, these categories can also be included as part of preventive health checkups, instead of limiting it to medical tests and diagnostics.
2. Senior Citizens and Super Senior Citizens: As per the current scheme u/s 80D, if an individual has a dependent, who is a super senior citizen (above 80 yrs) or the individual is a super senior citizen and has no mediclaim policy, a maximum deduction of Rs 30,000 can be claimed. Moreover u/s 80DDB, the dependent super senior citizen or the super senior citizen him/herself, who is being treated for ailments/diseases can claim up to Rs 80,000, whereas a senior citizen (above 60 yrs) can claim up to Rs 60,000. FM Arun Jaitley in the Budget 2018 might want to consider removing the super senior citizen category and simply have a single senior citizen category with maximum deductions.
3. New Additions to Schemes: Present schemes allow for deductions for medical expenses incurred. To advance this one step more, the government could consider deductions for expenses incurred on purchasing equipment/devices for certain diseases/ailments. Provisions could be made where equipment/gadgets that allow for a person to perform job functions, thereby making the disabled individual independent.
For example, if an individual can work in an office environment and perform tasks with the availability of braille keyboard, then the expenses incurred for purchasing the keyboard, either through the employer or the individual, can be reimbursed or claimed as a deduction. Some items that can be allowed might include: Air Purifier/filters etc. (for people with several respiratory problems), Limb Braces (for someone who needs a leg brace to walk, for example), Wheelchairs, Hearing aids etc. Such provisions would help the individual become less dependent and live a life with dignity, where they are functioning members of society within reason.
Another deduction that can be introduced in the Budget 2018 is a deduction for the expenses incurred by expecting mothers. The costs of pregnancy can be high and a deduction would decrease the monetary burdens of pregnancy on the parents. The set deduction amount, if uncovered by employer or insurance scheme, could include costs such as sonographies, scans, vitamin supplements, delivery (normal and caesarean), preventive treatments/classes etc.
These changes in the current schemes, if introduced by FM Arun Jaitley in the Budget 2018, would help the ever-changing society and the citizens living in it, as positive reforms will always be welcome and improve the citizens’ opinion of the government; a government which understands the needs/hardships of its people.
(By Chetan Chandak, Head of Tax Research, H&R Block India)
