The Government has been generous enough to make the following changes in the existing tax policy as well as understand the importance of preventive healthcare, which has resulted in:
- Five per cent service tax proposed on healthcare services was rolled back
- Healthcare services, including preventive health check-ups, continue to be out of the service tax net, further within the existing limit for deduction allowed for health insurance of Rs15000, a deduction of up to Rs 5000 is being allowed as per Budget 2012-13.
However, considering the present circumstances, a person will not be incentivised to save tax on preventive health check-up as the same falls under the ambit of health insurance. It is more like that one will invest Rs 15,000 on health insurance instead of dividing the said amount into health insurance and preventive health check-up.
Therefore, considering the rising incidence of non-communicable diseases (NCDs) and deaths caused by NCDs, the Government must give greater incentive to people to go for preventive screening. We wish to have the following changes:
- As mentioned above, presently health insurance and preventive health check-up are clubbed together under one category for tax benefit. We wish to have a separate category for preventive health check-up so that people get a precise and clear incentive to go for a preventive health check-up.
- The amount allocated for preventive health check-up for the whole family is Rs 5000. Keeping in mind the practical aspects of healthcare the amount is insufficient to carry out a comprehensive screening programme that will not only include lab diagnosis but also high-end imaging to detect the possibility of NCDs at an early stage. We, therefore, want the tax deductible amount on preventive health check-up to be raised from Rs 5000 to Rs 15000
If our recommendations are accepted, it will result in more number of people choosing prevention. This will have a positive impact on the burden of non-communicable diseases in India. There will also be a huge impact on the economy as India is slated to lose $ 237 billion during the decade 2005-2015 because of NCDs, if no timely preventive measures are taken.