1 min read.Updated: 09 Jan 2021, 09:20 PM ISTAvneet Kaur
'It is also crucial to reintroduce the medical reimbursement with higher limit of ₹50,000 tax deduction which got merged in standard deduction during finance budget 2018.'
Even prior to the global pandemic, health insurance was a growing sector, however, the pandemic has spotlighted the indispensable nature of having a safety net when it comes to healthcare costs. During the initial phase of pandemic, before any capping on hospital charges was introduced by the Government, people had paid medical bills as huge as ₹3 lakh- ₹20 lakh and even higher for covid treatment in the hospitals. In this situation, it is necessary to have health insurance as every family today faces questions on their preparedness coping with unforeseen and emergency healthcare costs.
"Given the global focus on health, we anticipate that this year’s union budget will have larger thrust on health reforms," says Mayank Bathwal, CEO, Aditya Birla Health Insurance.
Mayank Bathwal adds that his expectation is largely for the individual taxpayers, who need a tax impetus. As they are the ones who are investing their hard-earned money for a potential health condition, which sometimes might seem like an extra measure rather than an essential investment. This is prominently because family health insurance premiums versus the tax benefits are skewed.
Bathwal expects the Government to increase deduction under Section 80D against medical expenses, to increase the penetration. He says, "Hence it becomes important to increase the limits defined for mediclaim premium tax deduction under section 80D of the Income Tax Act to ₹1,00,000 ( ₹50,000 for self and spouse + ₹50,000 for parents). Further allowed dependent relationship should be re-looked".
At present, Section 80D of the IT Act provides a deduction to the extent of ₹25,000 in respect of the premium paid towards an insurance on the health of self, spouse and dependent children. The section further allows a deduction for upto ₹25,000 for premium paid towards a health insurance policy of parents of the assessee. It does not matter whether parents are dependent or not.
Section 80D of the Income Act provides an increased deduction of ₹50,000 in case any the parents of the assessee are senior citizens. An individual resident in India of the age of 60 years or more at any time during the relevant previous year is treated as a senior citizen.
"It is also crucial to reintroduce the medical reimbursement with higher limit of ₹50,000 tax deduction which got merged in standard deduction during finance budget 2018," Bathwal adds.