Institute of Chartered Accountants of India (ICAI) has suggested to insert ‘COVID-19’ as an eligible disease for the purpose of claiming deduction under section 80DDB.
It says, “In current times, it may be considered to allow medical expenditure incurred on treatment COVID-19 as expenditure incurred for treatment of specified disease for the purpose of claiming deduction under section 80DDB.”
In this regard, tax experts have suggested few recommendations.
However, the press release dated 25 June 2021 provided relief in terms of amount received by a taxpayer for medical treatment from employer, but there is no clarity on benefits in kind provided. There is a lack of clarity on the tax treatment of such cost of vaccinations (as borne by the employer) or medical supplies provided by the employer to employees and family members. “Therefore, such cost should be abundantly clarified to be non-taxable in the hands of employees,” says Parizad Sirwalla, Partner and Head, Global Mobility Services-Tax, KPMG in India.
Further, there is no specific deduction under the Act which covers treatment cost for COVID-19 patients who are not covered under any health insurance.
“Given the substantial cost involved in COVID-19 treatment in government or private hospitals, a separate deduction capped upto Rs 1,00,000 or actual treatment cost incurred by the taxpayer for self or family, whichever is lower, may be considered to be introduced to provide much-needed relief to the taxpayers specially when such costs are not covered under a health insurance policy/ reimbursed by the employer,” suggests Sirwalla.