Budget 2019: Will GST be removed on health insurance premium in the upcoming budget
Budget 2019 India:
In the forthcoming Union Budget 2019, India may provide a fresh aspect to the health insurance industry by making way for lesser cost with regard to payment of premium towards medical insurance. There is also another aspect to it and that is by giving incentives in terms of higher tax deductions from total income so as to boost the sector.
It is also expected that the tax benefit U/S 80D of the IT Act, 1961, could be revised upwards. at present, the highest deduction allowed is up to Rs 25,000 a year and Rs 50,000 for those who are more than 60 years of age. With people purchasing policies with Rs 20 lakh and above sum insured incorporating critical sickness plans for self as well as family members, the limit demands a re-look amid rising medical inflation.
The government may like wise return to the IT deductions accessible US 80D for health Insurance and would hope to update the same upwards. This would boost more individuals to take health insurance.
The health insurance premium may, in any case, be out of reach for few people particularly the individuals who will most likely be unable to manage the cost of the adequate sum insured. As of now, the insurance premiums are taxed at a GST rate of 18% which raises the cost of buying health coverage. Since the purchase of a health coverage policy isn’t carried out for investment reason, the government could either bring down the existing GST rate for health insurance premiums or could exclude it for policies having up to a cover of Rs 5 lakh.
The choice on GST will be that as it may be taken up by the GST Council. It stays to be checked whether GST on health cover premium gets a notice in the Budget discourse.
The voice in the business for making health cover less expensive is becoming more intense. All of us want to see goods and service tax (GST) taken out from insurance premiums. On one hand, the government is giving low-cost health and life insurance for Indians; however, then again, individuals who need to purchase health insurance are being charged 18% GST. Indeed, even regulator has referenced that 18% GST on premiums is ‘severe’. If not totally removing GST, they ought to, at any rate, accept and take it to single digits since it will benefit quite a lot of individuals in the nation.
Alongside health cover, there are sure other insurance products, like accident cover, home cover, term life insurance and so on that help in managing financial emergencies.
Under the realm of Ayushman Bharat, a Pradhan Mantri Jan Arogya Yojana (PM-JAY) set up in Augusts 2018; the temporary Budget 2019 saw an expansion in allocation towards the plan. Ayushmaan Bharat is a National health security scheme which gives a monetary coverage of Rs. 5 lakh for each eligible family every year. The plan covers the secondary and tertiary care hospitalization of the patients. It is prevalently known as Pradhan Mantri Jan Arogya Yojana or Modicare or National Health Protection Scheme.
If not complete removal of GST on the medical premium is accommodated in the Budget 2019-20, at any rate, the government may consider decreasing it from 18% as well as that on hospital and OPD costs.
