Dear All,

Kindly find below the main highlights of the Union Budget 2015-16 with regard to the health sector.

Budget Allocation

· Allocation of Rs.33,152 Crores to the health sector for the year 2015-16

· Enhanced Allocation to ICDS by Rs.1500 crore and Integrated Child Protection Scheme (ICPS) by Rs. 500 crore

· Allocation of Rs.10,351 crore for women and child development for the year 2015-16

Changes in ESIS Scheme

· With respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognized by the Insurance Regulatory Development Authority (IRDA).

Direct Taxes

· Increase in the limit of deduction in respect of health insurance premium from Rs.15,000 to Rs.25,000.

· For senior citizens the limit will stand increased to Rs.30,000 from the existing Rs.20,000.

· For very senior citizens of the age of 80 years or more, who are not covered by health insurance, deduction of Rs. 30,000 towards expenditure incurred on their treatment will be allowed.

· The deduction limit of Rs. 60,000 towards expenditure on account of specified diseases of serious nature is proposed to be enhanced to Rs.80,000 in case of very senior citizens.

· Additional deduction of Rs. 25,000 will be allowed for differently abled persons under Section 80DD and Section 80U of the Income-tax Act.

Indirect Taxes

Excise Duties

· Excise duty is being increased by 25% for cigarettes of length not exceeding 65 mm and by 15% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos.

· Maximum speed of packing machine is being specified as a factor relevant to production for determining excise duty payable under the Compounded Levy Scheme presently applicable to pan masala, gutkha and chewing tobacco. Accordingly, deemed production and duty payable per machine per month are being notified with reference to the speed range in which the maximum speed of a packing machine falls.

· Excise duty on chassis for ambulances is being reduced from 24% to 12.5%.

Customs Duty

· Exempt artificial heart (left ventricular assist device) from Basic Customs Duty of 5% and CVD.

Service Tax

· An enabling provision is being made to empower the Central Government to impose a Swachh Bharat Cess on all or certain taxable services at a rate of 2% on the value of such taxable services. The proceeds from this Cess would be utilized for Swachh Bharat initiatives. This Cess will be effective from a date to be notified.

· Service Tax to all ambulance services provided to patients is being exempted.