The work from home (WFH) culture and increase in healthcare costs in the backdrop of COVID-19 have led to a scare among salaried employees. They are worried about potential health issues, both physical and mental, as a lot have happened during the lockdown and the ongoing pandemic. Health insurance, preventive health check-ups and outpatient consultation have become more important for employees. Hence, a lot more deductions are expected on the health insurance front in this budget.
“The budget could do well to offer deductions or tax relief towards expenses on medical insurance, costs for treatment which do not require hospitalisation, counselling and diagnostic tests. This will push the demand for the healthcare industry and help our economy,” remarked Aditya Mishra, director and the founder of CIEL HR Services.
Life and health insurance assumes all the more significance during times like the current pandemic. However, the penetration of health insurance is still very low in India compared to other countries and measures are expected to increase this. “We expect measures, including an increase in the 80C and 80D limits, and a reduction in the GST rates on insurance premiums to improve social protection,” pointed out Dr. Arun Singh, global chief economist at Dun and Bradstreet.
Furthermore, with health taking precedence over other aspects, it is expected that the government may reconsider tax slabs towards health insurance, and this would improve the income of employees. “Reducing the GST on insurance premium and increasing the tax exemption cap limit under 80D will encourage more people to opt for health insurance. These measures will not only help people access quality medical treatment, but also better their lifestyle, thereby increasing the life expectancy of people in our country even further.” said Tapan Singhel, MD and CEO, Bajaj Allianz General Insurance.
Experts observe that employees working from home require further clarification on the tax front. There is still no clarity on certain allowances, and reimbursements such as conveyance have become taxable. These need to be done away with in order to help the employees already coping with stress and uncertainty in the WFH.
There are expectations that the ESIC India's largest health insurance programme may be modernised. “ ESI has been missing in COVID because of governance that is too large, old, and unrepresentative. The budget should announce modernisation of ESI governance in parallel with a June 1, 2021, deadline so that employees have the freedom to opt the service provider for their payroll deducted health insurance contributions,” remarked Rituparna Chakraborty, co-founder and executive vice president, TeamLease Services.
