Budget 2024: Ayushman Bharat Expansion and More Tax Benefits Expected

Ayushman Bharat Expansion

The government is expected to expand the Ayushman Bharat Health Insurance Scheme in the upcoming Union Budget 2024-25, which Finance Minister will present on July 23. This expansion aims to include senior citizens aged 70 years and above aligning with the current government’s manifesto promise to cover all senior citizens in this age group under the flagship scheme.

Launched on 23 September 2018, by Prime Minister. Ayushman Bharat Pradhan Mantri Jan Arogya Yojana stands as the world’s largest health assurance scheme, offering health coverage up to ₹5 lakhs per family annually for hospitalizations requiring secondary and tertiary care. Currently, the scheme benefits approximately 50 crore people below the poverty line. The proposed expansion to include those over 70 years of age aims to increase health insurance coverage in India, providing better healthcare access.

This move highlights the government’s commitment to enhancing healthcare facilities and support for senior citizens, addressing their specific healthcare needs through comprehensive insurance coverage.

National Health Claim Exchange

Finance Minister is anticipated to introduce the National Health Claim Exchange (NHCX). This digital platform is designed to enhance the efficiency of claim settlements by integrating insurance companies, hospitals, third party administrators (TPAs) and policyholders. Through NHCX all health insurance claims will be processed without cash transactions making it easier for beneficiaries to access healthcare services promptly.

Enhanced Tax Benefits for NPS

National Pension System (NPS) was introduced by the Indian government to provide people with a pension income for their retirement years. It is overseen by the Pension Fund Regulatory and Development Authority (PFRDA) and is accessible to every Indian citizen aged 18 to 70 years old. NPS offers a mix of equity and debt investments, making it a popular choice for retirement planning.

For tax benefits:

• Employees can get a tax deduction of up to 10% of their salary (basic + DA) under Section 80CCD(1) within the overall limit of ₹1.5 lakh under Section 80C.

• Additionally, contributions up to ₹50,000 under Section 80CCD(1B) are eligible for an extra tax benefit which is over and above the ₹1.5 lakh limit under Section 80C.

However, some argue that the ₹50,000 limit is too low due to rising living costs and longer life expectancies. They suggest increasing this limit to ₹1 lakh to encourage more savings for retirement and provide better financial security for retirees.

Expectations for Housing and Capital Gains Tax

With the Union Budget 2024-25 approaching people are hoping for changes that will help the housing sector and make capital gains taxes easier to handle. Currently, if you sell a property and make a profit, you have to pay capital gains tax. You can avoid this tax if you’ve owned the property for more than 24 months and use the proceeds to buy a new home, invest in certain bonds or put the money in the Capital Gain Account Scheme (CGAS) to later buy or build a house.

To make things easier and encourage investment, the government might raise the exemption limit on reinvestment in house property from ₹2 crore to a higher amount because housing prices are rising. They might also simplify the process of withdrawing money from the CGAS and reduce the required holding period from three years to two years, making it easier for taxpayers.

For investments in notified bonds, you can currently invest up to ₹50 lakh per financial year with a five year lock in period. The government might reduce this lock in period and increase the investment limit to ₹2 crore, making this option more attractive and boosting infrastructure development.

Simplifying Tax Deduction Processes

The process of tax deduction for transactions between residents is generally uncomplicated. But when the seller is a non resident, the buyer needs to get a Tax Deduction and Collection Account Number (TAN) and file a withholding statement. Making this process as easy as it is for resident transactions, where taxes can be paid using the Permanent Account Number (PAN) and the challan acts as a receipt could greatly reduce paperwork.

Final Words

With the Union Budget 2024-25 coming up, people are looking forward to announcements that will boost healthcare coverage for senior citizens, encourage retirement savings and simplify capital gains taxes. These steps are expected to support the government's vision of a developed India (Viksit Bharat) by 2047, driving economic growth and improving the quality of life for everyone.