Income tax deduction as a tool to mitigate catastrophic health expenditure for cancer care falls short of its purpose in India

Abstract

Income tax deductions aimed at alleviating the financial strain of catastrophic health expenses, prove inadequate in supporting cancer care in India. First, the stringent eligibility criteria for accessing this tax deduction restrict its availability to a narrow segment of the population. Typically, it is granted only to those who receive treatment at government-sanctioned medical facilities. Consequently, this deduction excludes a substantial number of patients, intensifying their financial woes. Moreover, the maximum deduction amount, despite sporadic revisions, falls short in the face of skyrocketing cancer treatment costs. The current structure of the income tax deduction does little to alleviate this burden, as the deduction often pales in comparison to the actual costs incurred. Rather than dissolution of this provision in the new tax regime, we propose a reform and reevaluation of the income tax deduction framework to ensure it genuinely fulfills its role in alleviating the financial strain of cancer care in India.