The Finance Minister has already presented Union Budget of 2018. Here’s how it is going to impact your health insurance policy
Every year, the Central Government comes out with the Union Budget amidst high hopes from every section of the population. Everyone is hooked to every word spoken during the budget speech, in the hope of something favourable being announced for them. Salaried people, farmers, corporates and economists all anticipate some good news that will make their daily affairs simpler.
Union Budget 2018 was presented by the Finance Minister on February 1 this year, and was predominantly a farmer’s budget, with healthcare also finding ground. There was a clear emphasis on rural India with the launching of new schemes for the agriculture sector.
As for insurance, there were some welcome changes made in the sphere of health insurance, bringing in some much-needed relief to senior citizens that are struggling to cope with rising cost of healthcare.
Increase In Deduction For Senior Citizens
The budget has increased the limit of deduction under Section 80D from ₹30,000 to ₹50,000 for senior citizen taxpayers with respect to health insurance premiums or medical expenditure. This move is a positive step towards improving the health and safety of senior citizens in the country. It will also reduce their tax liability and give them some respite from the ever-increasing cost of medical treatments, that consequently demand higher coverage amount.
This deduction is applicable towards payment of premium on health insurance policy or preventive health-check-up by a senior citizen. However, for a super-senior citizen (above 80 years of age), this deduction can be had for medical expenditure as well.
For a taxpayer who is paying the premium for his/her parents (senior citizens) this benefit essentially means that a total tax deduction can be availed for ₹75,000 instead of the earlier ₹55,000. Assuming that the son/daughter claims an exemption of ₹25,000 for himself/herself.
Proportionate Deduction For Single Premium Health Insurance
Single premium health insurance policies that are giving coverage for more than a year, will now be allowed deduction on a proportionate basis. This deduction will be allowed keeping in mind the number of years the policy is for, and subjected to the specified limit.
This proportionate deduction will provide dual benefits to the taxpayers by allowing for discount and deduction in the same year that would otherwise have been lost, had the cost of the total premium went over the prescribed limit.
The changes mentioned above are made with a view to increase the penetration of insurance in the Indian market and help senior citizens get the maximum value from their health insurance policy.
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