Section 80D: Health Insurance Deduction Explained
Section 80D — now Section 126 of the Income-tax Act, 2025 — rewards you for buying health insurance: premiums you pay for yourself, your family, and your parents reduce your taxable income. Like 80C, it works only in the old regime. The limits depend on age: higher if a senior citizen (60+) is covered.
Deduction limits
| Whose premium you pay | Maximum deduction |
|---|---|
| Self + spouse + dependent children (all below 60) | ₹25,000 |
| Self/family below 60 + parents below 60 | ₹25,000 + ₹25,000 = ₹50,000 |
| Self/family below 60 + parents 60 or above | ₹25,000 + ₹50,000 = ₹75,000 |
| Self 60 or above + parents 60 or above | ₹50,000 + ₹50,000 = ₹1,00,000 |
Within these limits you can also include up to ₹5,000 for preventive health check-ups (for self, spouse, children, or parents).
Rules that decide whether you get the deduction
- Payment mode matters: premiums must be paid in a non-cash mode (UPI, card, net banking, cheque). Cash payments don't qualify — except preventive health check-ups, which can be paid in cash.
- Whose policy: the deduction is for premiums on policies covering self, spouse, dependent children, or parents — not siblings or in-laws (unless they qualify as dependants under the rules).
- Senior-citizen medical expenses: if a 60+ parent has no health insurance, actual medical expenditure on them (up to ₹50,000) can be claimed instead.
- Employer-paid premiums: only premiums you pay count — not the employer's group-cover contribution.
- Old regime only: 80D gives no benefit under the new regime.
Example
Ritu, 35, pays ₹18,000 premium for her family's floater policy and ₹32,000 for her 65-year-old father's policy. She can claim ₹18,000 + ₹32,000 = ₹50,000 (within the ₹25,000 + ₹50,000 limits). In the 20% old-regime slab, that saves her about ₹10,400 in tax (including cess) — the insurance effectively costs much less than the sticker price.
Practical tips
- Buy before 31 March to claim for the Tax Year — premiums are deductible in the year they are paid.
- Keep the premium receipt with the policyholder's name, and pay from your own account.
- Don't buy an overpriced policy just for the deduction — the tax saving is at most ~30% of the premium; the cover itself must be worth it.
- Review parents' cover separately: a dedicated senior-citizen policy often beats a floater add-on after 60.
Frequently asked questions
₹25,000 for self, spouse, and dependent children (below 60), plus ₹25,000 for parents below 60 or ₹50,000 for parents aged 60+. Maximum combined: ₹1,00,000 when both self and parents are senior citizens. Includes up to ₹5,000 for preventive health check-ups.
Under the Income-tax Act, 2025, the health-insurance deduction is in Section 126. Limits and rules are unchanged from the old Section 80D.
No — premiums must be paid in non-cash mode (UPI, card, net banking, cheque) to qualify. Only preventive health check-up expenses up to ₹5,000 may be paid in cash.
Yes — actual medical expenditure on uninsured parents aged 60+ qualifies up to ₹50,000 under the same section.
No. Like 80C, the 80D deduction is available only under the old tax regime.