Monday, June 15, 2009

Govt proposes New Health Insurance Scheme in lieu of CGHS

With an effort to introduce Central Government Employees & Pensioners Health InsuranceScheme (CGEPHIS) recommended by Sixth Central Pay Commission, Ministry of Health & FamilyWelfare, invites Expressions of Interest from Insurers and Health Insurance consultants for the proposed scheme.

As per the document known as Expression of Interest published the CGHS website in this regard,Government of India proposes to provide inpatient health care services to the following personnel of the Central Government .


  • All personnel of the Central Government including All India Service officers, serving, newly recruited, retired and retiring and others who are covered under the existing CGHS(Central Government Health Services)  and under CS (MA) [Central Services (Medical Attendance) Rules] Rules shall be offered Health Insurance Scheme  on voluntary or on compulsorily basis . This could be:
  • CGEPHIS shall be compulsory to new Central Government Employees who would be joining service after the introduction of the health Insurance Scheme.
  • CGEPHIS shall be compulsory to new Central Government retirees who would be retiring from the service after the introduction of the Insurance Scheme.
  • CGEPHIS would be available on voluntary basis for the existing Central Government Employees and pensioners serving in CGHS area/ covered by CGHS. In this case such serving Central Government Employees and Central Government existing Pensioners shall have to opt out of CGHS scheme. They will also have the option of choosing both CGHS and Insurance policy. In such case the total premium has to be born by the beneficiary.
  • CGEPHIS would also be available on voluntary basis for the existing serving employees and pensioners in non-CGHS areas not covered by CGHS. In this case such serving Central Government Employees and existing Pensioners (who have opted for CGHS facility) shall have to opt out of CGHS scheme. They will also have the option of choosing both CGHS and Insurance policy. In such case the total premium has to be born by the beneficiary.

The proposals relating to sum assured/policy limits, family size, age limit, Insurance coverage are as follows

Sums Insured / Policy Limits

The scheme shall provide coverage for meeting all expenses relating to hospitalization of beneficiary members up to Rs. 500,000/- per family per year subject to stated limits on cashless basis through smart cards. The benefit shall be available to each and every member of the family on floater basis i.e. the total reimbursement of Rs. 5 .00 lack can be availed by one individual or all members of the family. The document also says the Government has proposed to restrict the benefit in respect of Domiciliary hospitalization and Maternity to Rs.50,000/- for each admission

Family Size / Age Limit

  • Serving Employees: Self, spouse, two dependent children and dependent parents (New born shall be considered insured from day one).
  • Retired Employees: Self, spouse and one dependent child.
  • Additional dependent family member can be covered under the scheme by paying the fixed percentage of premium per additional dependent family member. The premium shall be borne by the beneficiary.
  • All beneficiaries shall be insured till survival.
  • The definition of dependent shall be as per guidelines issued by Central Government.

Insurance Coverage

In addition to the coverage afforded under a standard medical insurance policy, the following shall also be covered under CGEPHIS:

  • Pre-existing diseases
  • Maternity benefit
  • Day-one Coverage for all diseases
  • New-born babies
  • Pre and Post hospitalization cover of 30 days and 60 days respectively
  • Domiciliary Hospitalization

Wednesday, June 3, 2009

Standard deduction for salaried employees may return

Ahead of the annual budget, here’s some cheer for salaried employees and pensioners. The finance ministry is considering bringing back standard deduction of up to Rs 20,000 in individual taxable incomes.
According to revenue department officials, the government may be willing to take a small hit in return for a spike in spending that it hopes will result from a bigger disposable income with the salaried classes.
Till the budget for 2005-06, a standard deduction of Rs 30,000 or 40 per cent of income, whichever was lower, was allowed to salaried employees with an annual income between Rs 75,000 and Rs 5 lakh. For those earning more, the standard deduction was fixed at Rs 20,000.
The standard deduction was meant to compensate salaried people for the fact that self-employed small business persons or entrepreneurs paid tax only on their net income after deducting business expenditure.
Industry has been demanding the re-introduction of standard deduction so that individual taxpayers are able to spend more and stimulate domestic demand. As Indira Gandhi’s finance minister, Pranab Mukherjee had in fact, raised it from Rs 5,000 to Rs 6,000 in the budget for 1983-84.
“There are two ways of looking at reducing personal tax. One option before the government is to do away with surcharges. The other option would be to give relief to individual earnings up to a particular level. In other words, keeping in mind fiscal deficit constraints, the benefit could be extended to only lower income earners.
This would help reduce administrative burden of the department and focus on the big fish,” said Sudhir Kapadia, Partner, Taxation, Ernst & Young. P Chidambaram had as finance minister removed the standard deduction after overhauling tax slabs and raising the exemption limit to Rs 1 lakh. He had introduced three slabs of 10 per cent, 20 per cent and 30 per cent for individuals in the Rs 1 lakh to Rs 1.5 lakh income bracket, Rs 1.5 lakh to Rs 2.5 lakh and over Rs 2.5 lakh respectively.
Source: The Indian Express
“Standard deduction should be restored,” the Institute of Chartered Accountants of India (ICAI) said in its pre-Budget memorandum to the government.