New Delhi: The government is reportedly planning to raise the cap on tax-free medical reimbursement limit. The cap currently fixed at 15,000 per year may soon be raised to Rs 25,000 a year.
The government is also planning to make medical insurance policies more attractive to customers.
Currently, the government allows a deduction of Rs 15,000 a year for medical insurance premium paid for spouse, children and the policy holder himself and for senior citizens, the deduction is Rs 20,000.
In the last few years, medical costs have gone up significantly and Rs.15000 annual limit on tax-free medical reimbursement often does not meet the hospitalization needs. The limits get breached easily as in case of government hospitals, it is a tough fight to get a bed and if one opts for private then they already charge too high.
The move is also expected to reduce the pressure on state-run hospitals and encourage people to cover their risks.
Usually it is seen that people buy insurance policies to claim high tax deductions however; they end up having lower than required cover for their family in case of a health emergency.
As a matter of fact, the BJP government has repeatedly said that it is against high taxation and wants to increase investments and savings of individuals instead.
The review of benefits for health spending is aimed at making the limits more realistic and in sync with current requirements.
