Budget: From increasing the tax exemption limit on premium to the new tax regime, the insurance sector’s demands in the budget

Budget Expectations 2024: Many important changes are expected to be made in the insurance sector in the upcoming budget hopefully.Before the budget, experts have suggested increasing the tax deduction limit on health insurance premium and also giving its benefits in the new tax regime. Finance Minister Nirmala Sitharaman will present the budget for 2024-25 on July 23. This will be the first major policy document of the third term of the Narendra Modi government.

Demand to increase tax exemption limit on health premium

Anup Rau, Managing Director and CEO of insurance company Future Generali India Insurance, said that despite the significant increase in the cost of health care across the country, the deduction limit on health insurance premium under Section 80D of the Income Tax Act has remained unchanged for the last 9 years. He said that it would be best if the health insurance limit is linked to the inflation rate and changes automatically every one or two years. Also, there is a need to increase the benefits of health insurance in the new tax regime as it is important to increase its reach. That is why, we hope that some increase in the exemption limit on health insurance premium will be announced in the upcoming budget.

Also read: FD Rates: Good opportunity to earn on 2 year FD, these banks are offering up to 9.10% interest

what will be the benefits

Bajaj Allianz General Insurance MD and CEO Tapan Singhal said that reforms such as offering health insurance to employees at lower rates, reduction in GST on health insurance premium and increase in exemption limit under 80D will make health insurance more affordable and accessible. Singhal said that ‘In addition, removing the deduction limit for health insurance premium for senior citizens will reduce their financial burden significantly.

DS Negi, CEO of Rajiv Gandhi Cancer Institute and Research Centre (RGCIRC), said that it is important to focus on improving cancer care in the country. It is important to ensure that all patients have access to these state-of-the-art treatments. He said that extending Ayushman Bharat to those above 70 years of age will be highly beneficial for senior citizens. Also, it needs to be noted that the current limit of Rs 5 lakh is not enough for serious diseases like cancer. The cost of treatment of this disease can go up to Rs 15-20 lakh.

Also read: How to create ABHA account on e-Health Dham portal, this digital health ID is very useful, special facility for pilgrims

Pawan Chaudhary, president of the Medical Technology Association of India (M-TAI), said that the customs duties and taxes imposed on medical devices in India are the highest in the world and this directly affects the patients. He said that on the other hand, countries like Singapore, Hong Kong, Italy and Norway do not impose any such duty. Australia and Japan impose only a minimum duty of 0.5 percent, while it is two percent in the US and three percent in China. He said that in such a situation there is a risk of illegal import of medical devices in India. Such trade will reduce the country’s revenue.

Currently, tax exemption is available on health insurance

Currently, under Section 80D of Income Tax, the benefit of tax deduction is available on the health insurance premium paid for children. The upper limit of tax deduction for the family i.e. child, wife and self in the health insurance policy is Rs 25,000. Under Section 80D of Income Tax, a family with a child can claim a tax deduction of up to Rs 25,000. Apart from this, comprehensive health insurance cover ensures a claim of up to Rs 5,000. With this coverage, families can also claim a sub-limit of up to Rs 5,000 for preventive health checkup of children.

Also read: Bajaj Finserv Savings+: A special scheme for higher returns on the money lying in the savings account, what are its special features

Additionally, sections 80DD and 80DDB offer tax deductions for expenses incurred on medical treatment of children with disabilities or specific illnesses. Under section 80DD, tax deduction can be claimed for expenses related to medical treatment and maintenance of children with disabilities, while section 80DDB allows deduction for treatment of specific illnesses such as AIDS, neurological diseases and malignant cancer. The amount of deduction under section 80DD depends on the extent of disability, with a maximum deduction of Rs 75,000 for those with more than 40% disability and Rs 1,25,000 for severe disability.