Yes, "it is free only if, you are a taxpayer.
Most of the population in India is not covered under health insurance and depends on their savings or borrowing for Hospital expenses. But the government also encourages everyone to buy medical insurance and allows you to avail of tax deductions under Section 80D.
What is Section 80D?
Every individual or HUF can claim a deduction from their
total income for medical insurance premiums paid in any given year under
Section 80D. This deduction is also available for top-up health plans and
critical illness plans.
The deduction benefit is available not only for a health
insurance plan for self but also for buying the policy to cover spouse, or your
dependent children or parent.
The best part is that it is over and above the deductions
claimed under Section 80C.
Who is eligible for deduction under Section 80D?
Deduction for medical insurance premiums and medical
expenses for senior citizens is allowed to the Individual or HUF category of
taxpayers only.
For individual or HUF taxpayers, insurance can be availed for :
• Self
• Spouse
• Dependent
children
• Parents
Any other entity cannot claim this deduction. For example, a
company or a firm cannot claim a deduction under this section.
Payments eligible as deduction under Section 80D
An individual or HUF can claim a deduction under Section 80D
for the payments mentioned below:
• A medical
insurance premium paid for self, spouse, children, or dependent parents in any
mode other than cash.
• Expenditure
incurred on the account of preventive health check-ups
• Medical
expenditure incurred on the health of senior citizen (aged 60 years or above)
who is not covered under any health insurance scheme.
• The
contribution made to the Central Government health scheme or any scheme as
notified by the government.
Deduction available under Section 80D
The deduction allowed under Section 80Dm is Rs 25,000 in a
financial year. In the case of senior citizens, the deduction limit allowed is
Rs 50,000.
The table below captures the amount of deduction currently
available for FY 2020-21
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