Budget should throw open Section 80C for health-related expenses of senior citizens

S Murlidharan | Updated on January 27, 2020

Also, the Budget should not insist on total absence of health cover for senior citizens to enjoy the ₹50,000 deduction under Section 80D

Section 80C of the Income-Tax Act, 1961 is the most talked about section both in the official circles and households, thanks to its omnibus character and potential to reduce one’s taxable income. It offers something for almost everyone. To the working, it lays out a wide spectrum of choice many of them often going abegging thanks to the niggardly, one-size-fits-all overall limit of ₹1.50 lakh.

Contribution to statutory and recognised provident fund is one statutory deduction that often exhausts this limit insofar as middle and senior executives are concerned. No wonder there has been a perennial clamour for liberally upping the rather constricting limit of ₹1.50 lakh.

Be that as it may, children education, cost of a house and repayment of principal of the home loan, terms deposit for five years, contribution to Public Provident Fund (PPF) among others vie for utilisation. But all these as said earlier are useful only for low-paid employees and self-employed persons.

Health insurer’s nightmare

Curiously, senior citizens do not figure in the section at all. Not for them are tuition fees of children (having already discharged that duty in their prime) and not for them is the prospect of buying a house in the stage of their life where home loan companies look askance at them. It is that stage of the life when the prospect of medical and hospital bills haunt them.

Shouldn’t the section allow senior citizens some solace? Why thrust on them the schemes they don’t want and deny them what they want? A senior citizen is a health insurer’s nightmare and often a straight no-no. Even if he condescends to give a health cover, it comes with several riders and at a very high premium. The Finance Minister should throw open Section 80C for health-related expenses for everyone in general and senior citizens in particular.

To be sure, Section 80D comes to the rescue of the senior citizens when it condescends to allow a maximum of ₹50,000 on medical expenses provided they did not have any health insurance cover. The Narendra Modi government last year showed some sensitivity by dropping the adverb ‘very’ alongside senior citizens. In other words, the aforesaid deduction of ₹50,000 on account of medical expenses is allowable from the AY 2020-21 to all senior citizens and not only to those who were 80 years or more. This must be hailed as a progressive legislation but more needs to be done in favour of our elders many of whom may be in the twilight of their lives.

Twin benefits, please

Rupees fifty thousand may be just enough for buying pills and insulin shots for a diabetic couple afflicted with high blood pressure as well in addition. But God forbid, should they have to be hospitalised, the world about them would crumble in the absence of a health cover. So for God’s sake, do not insist on total absence of health cover for senior citizens so as to be able to make the grade for the ₹50,000 deduction under Section 80D. By putting this unreasonable restriction the government is unwittingly stopping caring and conscientious children from taking health covers for their parents and in the process unwittingly creating filial and fiscal disharmony.

And do not make Section 80C out of bounds for senior citizens as is the upshot of the extant regime offering avenues they do not want. Let them enjoy the twin benefits — ₹50,000 under Section 80D for both hospital and non-hospital medical expenses and Section 80C for hospitalisation which is a grim possibility during the sunset of their lives.

Finance Minister Nirmala Sitharaman should also in the upcoming Budget 2020-21 amend Section 80C to empower CBDT to list avenues and schemes qualifying for deduction. And why not given the fact that if the executive can notify avenues for mandatory CSR spends by the corporates, there is nothing wrong in empowering CBDT to notify avenues under Section 80C. Let it be open-ended and not cast in stone.

The writer is a Chennai-based chartered accountant

Published on January 27, 2020

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