Union Budget Expectation 2021: The Covid-19 pandemic has brought to the fore the importance of having health insurance. Industry experts say even after the rollout of the government’s Pradhan Mantri Jan Arogya Yojana (PM-JAY), a large part of the Indian population is still without any health insurance policy.
Experts expect the budget to increase health insurance penetration by offering special tax benefits for new health insurance buyers. For instance, the government’s announcement of including payment of premiums on purchase of new insurance policies (between October and March 2021) under the LTC scheme will incentivise people to buy the insurance and improve its penetration.
Parimal Heda, Chief Investment Officer, Digit Insurance says, “The budget could enhance the extent of income tax exemptions under Section 80D to Rs 50,000 for individuals from 25,000 currently and to Rs 75,000 for senior citizens from Rs 50,000 currently.”
On the home insurance front, experts say making home insurance mandatory at the time of purchase of the property or giving special rebate (similar to health Insurance) for Insurance of houses could incentivise people to buy home insurance. Heda says, “Additionally, the government could roll out a mass product scheme similar to its flagship programs like PMJSBY, PMFBY, etc. for compulsory home insurance under affordable housing.”
Further, experts say the budget could look into reducing the GST percentage for non-life insurance products to incentivise people to buy more insurance to cover their assets.
Salil Bhandari, founder, BGJC Associates and LLP says, “The Indian economy is on a recovery path. Although there are parameters which reflect that the overall growth may take 2-3 years, the initial fillip has happened.” He further adds, “The key parameters like growth in GST collection, commercial vehicle manufacture goods movement is growing which is reflected in improving results of the corporate sector in most of the products.”
The salaried class has been consistently the largest number of taxpayers in the tax-paying classes. Experts say, as they have limited options in rebate and therefore with increasing costs the standard deduction should be enhanced to Rs 1 lakh.
For the Senior citizens, they have to be taken care of and their income reduces as they grow in age. Therefore, industry experts believe, a couple of important support should be provided; for instance, medical benefits – any amount of insurance paid should be allowed as a rebate. All Hospital bills and bills of nursing homes, doctors with PAN, chemist shops registered under GST should be allowed as a deduction up to Rs 1 lakh or 20 per cent of their Gross total Income whichever is more.
Bhandari says, “Any travel made by senior citizens, on a scheduled airline or Indian railways should be allowed as a deduction from their income.”