Monday, January 3, 2011

Tax exemption on medical expenses - when will the government realize?

Currently, I pay my entire medical expenses out of pocket. This is a significant part of my income. The part that I don't like is that I pay tax even on the part of my income that I spend on my medical expenses. This is not fair at all.

This struck me as weird when I realized that if someone donates a sum of money to a charity, he or she gets exemption on the sum donated under section 80G. Now, there is an exemption for medical expenses for an individual under section 80DDB. However, this exemption is capped at Rs. 40,000 per year. I am, not for a second, arguing that the exemption under section 80G for donating to charities is wrong. But, taxing money used for medical bills is absolutely wrong. There should be no cap. Period. What is the argument for a cap? Someone, please enlighten me.

We have no healthcare policy worth mentioning in India. Ok, we have Aarogyasri but that is only in Andhra Pradesh and that too only for the very poor (on paper at least). Its not like people who can afford their healthcare expenses can do so for ever. The money that I spent on taxes year after year could have been saved and I could have bought the NxStage System One, for example.

There is so much wasteful expenditure that the government incurs every year. The Haj subsidy, for example. Even true Muslims resent this and point out that the Holy Quran forbids this. Then there is the money that is spent on implementing various government schemes named after one politician or the other. Remember Mayawati's monument mania?

Any amount spent by an individual on his health (backed by a proper prescription and bills) must be totally exempt from Income Tax. I have a lot to say about the duty on importing medical equipment or consumables but that topic deserves another post.

It is high time the government woke up to this stark reality. It should really get its priorities right. If you cannot make life easier for us, at least don't make it more difficult!

2 comments:

Sai Manohar said...

this is one serious problem that i have been wanting to speak of. I was shocked to find out that majority of people having a failed transplant in India was due to non adherence of medication(Immunosupressants) ,citing financial reasons.

In a away, I feel i should not speak about this as people who spend almost two folds than what I do today aren't complaining. The govt has to take up this issue very seriously to bring a small smile that could take away a bit of their pain.

Saimanohar(Sam)

Shravan Kumar. M said...

Actually there is even a big issue may be no one cares of:

Salaried employees pay TDS i.e., Tax Deducted at Source i.e., salaried employees are paying tax from their salary to government even before receiving their money to hand/ adding revenue to treasury.

On top of this, for every product salaried employees buy, eat at restaurants and so on they pay so much of tax i.e., many restaurants now a days charge 14.1% of tax.

How stupid salaried employees are!!! Pity :(

Disclaimer: No personal taking please!