Personal Finance

Limited sop to seniors

Nalinakanthi V | Updated on March 12, 2018 Published on March 29, 2015

Tax breaks on medical expenses are up, but is that enough?



If your parents are aged 80 or above and have found it difficult to get medical insurance, you have some reason to cheer. The 2015-16 Budget has allowed a tax deduction on expenses incurred towards treatment of very senior resident Indians aged 80 and above who do not have medical insurance cover. Section 80D of the Income Tax (IT) Act, which traditionally covered health insurance, has now been expanded to cover the medical expenses of such seniors up to ₹30,000 annually beginning 2015-16.

This tax exemption can either be claimed by very senior citizens, if they are tax assessees, or by their children in case they are dependents.

Specified diseases

The other big move has been the increase in the deduction limit for patients suffering from specified diseases, who incur heavy medical costs.

Patients aged 80 years and above suffering from terminal illnesses such as malignant cancer, chronic renal failure and haematological disorders such as haemophilia and thalassaemia can now claim a deduction of up to ₹80,000 annually from their income under Section 80DDB for expenses that were incurred on medical treatment. This is higher than the erstwhile limit of ₹60,000.

In addition to these, treatment costs of neurological diseases such as dementia and Parkinson’s disease, where the disability level is 40 per cent and above, are also tax-exempt.

If you have dependent parents suffering from any of the above diseases, you can claim tax exemption on their medical expenses. For claiming the tax benefit, you will have to obtain a valid certificate from a specialist who possesses the requisite qualification as notified by the Income Tax Department and works in a Government hospital.

Why it may fall short

While these provisions to help assessees with the rising cost of medical treatment are welcome, seniors must note that they may fall short on the following counts. For one, the expense limits specified for tax deductions may not be enough.

This is because, the average treatment cost for chronic illnesses such as diabetes, hypertension and cardio-vascular problems is much higher. The average monthly pharmacy bill for patients suffering from diabetes is in excess of ₹5,000.

According to specialists, disorders such as diabetes can lead to secondary complications such as heart attacks. Hence, long-standing diabetics are given preventive medication for conditions such as cholesterol, which will cost more.

Patients suffering from chronic end-stage renal failure will require oral medication costing at least ₹10,000 to ₹15,000 every month, apart from haemodialysis therapy at least thrice a week. According to a leading nephrologist, the cost per sitting varies between ₹1,500 and ₹2,500. For diseases such as cancer, the cost of treatment goes up with age and other medical issues that the patient may be facing.

“The typical treatment for patients suffering from breast cancer, which is the commonest cancer among women, includes surgery, radiation and chemotherapy, in addition to oral anti-cancer drugs,” says Dr Srinivasan, senior consultant oncologist at Chennai-based Dr Kamakshi Memorial Hospital.

According to him, radiation therapy alone costs between ₹2-4 lakh, while chemotherapy for a period of six months works out to ₹1-1.5 lakh.

In addition to these, patients will have to fork out about ₹10,000 every year for oral anti-cancer drugs. Given the considerably high cost of treatment for such chronic/terminal illnesses, increasing the exemption limit on treatment costs for these illnesses will benefit the patient population at large.

Two, the deductions also leave out people between the 60 and 79 years of age, among whom the incidence of diabetes and hypertension is high.

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