Why Budget 2022 should allow tax deduction for expenditure on Covid treatment

The pandemic has hit the middle-class hardest. Many have spent their life savings on the medical treatment of their near and dear ones. In this challenging time, the government should understand the suffering of the middle-class taxpayers. The Finance Minister should extend tax relief for the expenditure on medical treatment of the covid affected to those who didn’t have medical insurance. These people have borne the devastating financial impact of COVID-19 on their own.

In the Union Budget 2022-23, the government should provide tax relief to the people who are paying for medical treatment of Covid-19 on their own. How this tax relief could be provided to such people is suggested below.

The Income-tax Act, 1961 allows a deduction from taxable income under section 80D to an individual or HUF (Hindu Undivided Family) in respect of the amount paid for the health insurance premium, preventive health check-up and contribution to the Central Government Health Scheme (CGHS). Expenditure on medical treatment of senior citizen can also be claimed as a deduction under this section subject to certain conditions. An individual can claim a deduction in respect of the premium paid for health insurance for himself, spouse, dependent children and parents. A HUF is allowed a deduction for health insurance premium paid for any family member. A HUF is also allowed deduction for expenditure incurred on medical treatment of any member who is a senior citizen, subject to certain conditions. The deduction is allowed subject to the following limits and certain conditions:


Section 80D allows a deduction for medical expenditure only if incurred on the medical treatment of a senior citizen not covered under health insurance. In other words, no deduction is allowed if the amount is incurred on medical treatment of:

(a)A person who is not a senior citizen; or

(b)A person who is covered under a health insurance policy.

Though senior citizens are more vulnerable to the coronavirus, it has indeed infected and hospitalised people of all age groups. It is requested that the government expand the scope of section 80D to allow a deduction for expenditure incurred on covid treatment of every person, irrespective of age.

Thus, if an individual incurs expenditure on medical treatment of covid-19 for himself, spouse or dependent children, he should be allowed a deduction of up to Rs 50,000 even if the infected person is not a senior citizen. Further, if the expenditure is incurred for treatment of covid-19 for parents, an additional deduction of up to Rs 50,000 should be allowed even if such a parent is not a senior citizen. Similarly, a HUF should be allowed a deduction of up to Rs 50,000 for expenditure incurred on covid treatment of members below the age of 60 years.

Accordingly, the limit of deduction under section 80D may be revised as follows:


(The authors are Naveen Wadhwa, Chartered Accountant and DGM – R&D,, Dipen Mittal, Chartered Accountant and Senior Manager – R&D,

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