One Slice At A Time

On the health insurance front, the action may have just begun. In the coming year, expect more calls from insurance companies offering their mediclaim plans. The deduction allowed in respect of medical insurance premium under section 80D has been increased from the earlier figure of Rs 10,000 to Rs 15,000 and, in the case of a senior citizen, from Rs 15,000 to Rs 20,000. Says Antony Jacob, MD, Royal Sundaram Alliance, "This step will encourage more people to buy health insurance, safeguarding their future in times of need, even improve market penetration."

An exclusive mediclaim plan for senior citizens from National Insurance Company called the Varishta Mediclaim is in existence. The FM has urged the other three psus to start offering a similar product. But M. Ramadoss, cmd, Oriental Insurance, says that "we already have a mediclaim policy which covers persons till the age of 85 and also offers a renewal of policy till 90 years. We will discuss with the finance ministry regarding the Varishta policy and if need be, we will bring out a specialised product". Ramadoss is also disappointed that the tax benefit under Section 80 (D) for medical insurance has been extended by only Rs 5,000. With rising healthcare costs, he expected the FM to raise the limit to Rs 25,000.

As an investor, you might have noticed there are formalities under the "know your customer" norms. This is a step to track unaccounted monies and the Banking Cash Transactions Tax (BCTT) has the same objective. However, the exemption limit on such transactions by individuals andHUFs has been raised from Rs 25,000 to Rs 50,000.

Barring these minor changes in tax slabs and the effective rates, other things remain the same. The options and amounts available under section 80C remain constant. Health insurance plans that include mediclaim from non-life or general insurance companies and the health 'riders' available with the life insurance companies, all covered under section 80D, get a booster. Salaried employees who are already covered under group insurance through their employers should consider getting individual mediclaim on their own.

Overall, changes in taxes in this budget were nothing that warrants a celebration, but its benefits are not to be shrugged away either.