The health insurance sector has sought favourable tax treatment from the government to help penetrate this important security to the masses especially on account of rising hospitalisation bills during the pandemic.
In a set of recommendations involving tax treatment for health insurance policies, the industry had urged the government to immediately increase the 80 D tax deduction benefit for individuals on their premium payment for health insurance policies.
The limit currently stands at around d Rs 25,000 for health insurance cover for self and family and additional amount of Rs 25,000 for premium payment towards health policies taken for dependent parents upto 60 years of age and Rs 50,000 deduction for cover to patents above 60 years.
The industry has also sought tax treatment for health policies at par with life insurance cover that attracts lower GST rate of 5 per cent against 18 per cent payable on health insurance.
“The health insurance has become an essential commodity and needs to be slotted in the 5% GST tax slab along with commodities such as food items to make it more affordable for people to get access to quality healthcare care. Also, the increase in the limit of tax deduction in Section 80D of the Income Tax Act can help better penetration of health insurance,” said Prasun Sikdar MD & CEO ManipalCigna Health Insurance Company Limited.
Due to the Covid-19 pandemic situation, the consumer mind set has undergone a tectonic shift from looking at health insurance as a priority to seeing it as a necessity. Whether it is the government, bureaucracy, industry, media or common man, all now discussing protecting lives and financing for the same in the form of health insurance. In this regard greater support from the government could help to improve penetration of these life saving insurance policies.
“The healthcare sector must be supported and encouraged to expand and thrive so that it can make a real difference to the country’s economy and employment,” Sikdar said.