Allow COVID related hospitalization expenses as Income Tax deduction

To,
The Finance Minister

Sub: – Request to allow hospitalization expenses incurred for COVID-19 treatment as Income Tax deduction.

Respected Madam,

As you are aware presently, the country is reeling under severe stress due to Covid-19 pandemic. It has impacted lives and livelihoods of the people of the country. When a person or a relative of a person gets infected with Covid-19 lot of medical expenditure is incurred in the treatment of the patient in case he/she gets hospitalized. If the patient is not under any insurance cover then he/she has to pay the entire expenses from his pocket, which puts a big hole in his pocket. Added to his/her woes is that this expenditure incurred is not allowed as deduction under the Income Tax Act, 1961. Meaning to say the person incurs his expenditure from the income remaining after tax is deducted. Say for example Mr.A earns 10,00,000 p.a. he pays Rs.1,12,500 as Income Tax, under the old regime, and is left with only Rs.8,87,500 as his disposable income. Out of this he has to incur his hospitalization expenses, house rent and other daily expenses as well, the net amount will be a meagre sum to survive. Thereby I humbly request you allow the hospitalization expenses as Income Tax deduction. Moreover, person also takes loan to meet his hospitalization expenses. The interest paid on such loan is also not allowed as deduction under the Act.

Further sec 80DDB r.w.r 11DD of the Income Tax Act, 1961 allows deduction of notifiable diseases only and the rule does not cover COVID-19 disease. Further only a meagre sum of Rs.40,000 (Rs.1,00,000 for senior citizen) is allowed as deduction. The rule/section can be amended to include COVID-19 disease as notifiable diseases and increase the deduction limit to the actual expenditure incurred, as per invoice, without any cap. To remove malpractices deduction can be allowed only when payment is made by any mode other than cash.

The Finance ministry is always known to take prompt action to protect the interest and reduce hardships of the common man. Hence keeping faith in the ministry I humbly request your good self to allow the COVID related hospitalization expenditure as deduction under the Income Tax Act, 1961 for the relevant Financial Years.

Thanking You,
Your Sincerely,

CA Akhil Jain