Be ready to pay Service Tax on health care from next budget (2012)

Be ready to pay Service Tax on health care from next budget (2012). There are clear indications that government is going to impose Service Tax on health insurance from next budget (2012) In case of health care- two options are being considered.

Option 1.

To exclude all services provided by clinical establishments with turnover under Rs.4 crores from the tax. This means that apart from your medical bill at a large private hospital you will also have to pay service tax, which could be 10% of the total amount. The implication of this will be that you should increase sum assured at least by 20% (10% to take care of Service Tax and 10% to take care of inflation).

Option 2.

To leave out hospitals, medical care, diagnostic and paramedical services but tax health check-ups and cosmetic surgery”. After the last budget, the government had deferred a tax on most healthcare facilities in the wake of public protests.