Healthcare costs in India are rising fast, and Section 80D of the Income Tax Act (renamed to Section 126 under the Income Tax Act, 2025) offers a genuine way to offset some of that cost through tax savings. It lets you claim a deduction on health insurance premiums paid for yourself, your family, and your parents, separate from and in addition to the ₹1.5 lakh limit under Section 80C (renamed to Section 123 under the same new Act).
This deduction is available only under the Old Tax Regime. The New Tax Regime, now the default, does not permit Section 80D deductions at all.
What Is Section 80D of the Income Tax Act?
Section 80D allows individuals and Hindu Undivided Families (HUFs) to claim a deduction for premiums paid on health insurance. This holds true whether the policy covers yourself, your spouse, dependent children, or your parents. It also covers preventive health check-up expenses and, in specific cases, actual medical expenses for uninsured senior citizen parents.
Section 80D Deduction Limits
| Category | Age of Insured | Maximum Deduction |
|---|---|---|
| Self, spouse, dependent children | Below 60 | ₹25,000 |
| Self, spouse, dependent children | 60 and above | ₹50,000 |
| Parents | Below 60 | ₹25,000 |
| Parents | 60 and above | ₹50,000 |
| Preventive health check-up | All ages | ₹5,000 (within the overall limit, not additional) |
If both you and your parents are below 60, the combined maximum you can claim is ₹50,000. If your parents are senior citizens but you’re not, the combined maximum rises to ₹75,000. And, if both you and your parents are 60 or above, the maximum reaches ₹1,00,000.
Does Term Insurance Qualify for a Section 80D Deduction?
Generally, no, and this is a common point of confusion. A standard term insurance policy is a pure life cover product. Its premium qualifies under Section 80C, not Section 80D. Section 80D specifically covers health insurance premiums. The exception: if your term insurance plan includes a health or critical illness rider, the portion of the premium attributable to that specific rider can qualify under Section 80D. However, the base term insurance premium itself does not.
Who Is Eligible for Section 80D Deductions?
- Individual taxpayers, for premiums paid for themselves, their spouse, and dependent children.
- Anyone paying for their parents’ health insurance, whether or not the parents are financially dependent on them.
- HUFs, for premiums paid for any member of the HUF.
The policy must be from an IRDAI-registered insurer, and payment must be made through a non-cash method (credit card, debit card, net banking, cheque, or UPI) to qualify, except for preventive health check-ups, which can be paid in cash.
How Much Can You Actually Claim? A Worked Example
Suppose Mr. Sharma, aged 45, pays ₹18,000 in health insurance premiums for himself, his spouse, and his children, and spends ₹3,000 on a preventive health check-up.
| Particulars | Amount |
|---|---|
| Health Insurance Premium | ₹18,000 |
| Preventive Health Check-up | ₹3,000 |
| Total Deduction Claimed | ₹21,000 |
Both amounts fall within his ₹25,000 limit (he’s below 60), so the full ₹21,000 is deductible.
Section 80D for Parents
If you pay health insurance premiums for your parents, you can claim this separately from your own limit:
- Parents below 60: up to ₹25,000
- Parents 60 or above: up to ₹50,000
If your senior citizen parents don’t have health insurance at all, you can still claim up to ₹50,000 for their actual medical expenses, doctor’s consultation fees, hospitalisation costs, and treatment-related expenses, provided you have proper documentation.
Section 80D for HUFs
An HUF can claim the same deduction structure for premiums paid for any member: up to ₹25,000 for members below 60, rising to ₹50,000 if the insured member is a senior citizen, plus the ₹5,000 preventive check-up allowance within that limit.
Multi-Year Premiums Paid in a Lump Sum
If you pay a multi-year health insurance premium upfront, Section 80D lets you claim the deduction proportionately across the policy’s tenure. For example, if Mr. Kumar pays ₹60,000 for a 3-year policy, he can claim ₹20,000 each year for three years, rather than trying to claim the full amount in a single year.
Mode of Payment
Premiums must be paid via a non-cash method: credit card, debit card, net banking, cheque, or UPI. Cash payments don’t qualify for the deduction, except specifically for preventive health check-up expenses.
Related Deductions: Section 80DD and Section 80DDB
Two related sections often come up alongside Section 80D, though they cover different situations:
Section 80DD: Treatment of a Dependent With a Disability
Covers medical treatment, training, and rehabilitation expenses for a dependent (spouse, children, parents, or siblings for individuals; any HUF member for an HUF) with a disability, plus premiums on insurance policies specifically designed for such dependents.
- ₹75,000 for 40% to under 80% disability
- ₹1,25,000 for 80% or more disability
A medical certificate from a government hospital is required, and the dependent must not have separately claimed a deduction under Section 80U.
Section 80DDB: Treatment of Specified Illnesses
Covers actual expenses for treating specified diseases, including cancer, chronic kidney failure, and certain neurological conditions like Parkinson’s disease, for the taxpayer or a dependent.
- ₹40,000 or actual expenses, whichever is lower, for those below 60
- ₹1,00,000 or actual expenses, whichever is lower, for senior citizens
A prescription from a specialist at a government or private hospital, along with medical bills, is required.
You can claim Section 80D and Section 80DDB deductions in the same year, provided you meet the eligibility criteria for each separately.
Conclusion
Section 80D (renamed to Section 126 under the Income Tax Act, 2025) offers meaningful tax relief for a genuinely important expense, protecting your family’s health. Combined with Sections 80DD and 80DDB for disability and specified illness treatment, these provisions can add up to significant savings for taxpayers still on the Old Tax Regime. Keep your premium receipts, medical certificates, and prescriptions organised, since proper documentation is what actually lets you claim these deductions without issues later.
FAQs
What is the maximum deduction allowed under Section 80D?
Up to ₹1,00,000 in total, if both you and your senior citizen parents are insured and both are 60 or above. The exact maximum depends on the age combination, ranging from ₹50,000 to ₹1,00,000.
Does Section 80D cover term insurance premiums?
No, generally. Term insurance premiums qualify under Section 80C, not 80D. Only a health or critical illness rider attached to a term plan can qualify under Section 80D, and only for that rider’s portion of the premium.
Are preventive health check-ups covered under Section 80D?
Yes, up to ₹5,000, but this amount is included within your overall limit (₹25,000 or ₹50,000), not an additional amount on top of it. It’s also the one expense under this section that can be paid in cash.
Can I claim Section 80D under the New Tax Regime?
No. This deduction is available only under the Old Tax Regime.
Can I claim a deduction for my parents’ medical expenses if they don’t have health insurance?
Yes, if they’re senior citizens (60 or above), you can claim up to ₹50,000 for their actual medical expenses, even without an insurance policy in place.
What is the difference between Section 80DD and Section 80DDB?
Section 80DD covers treatment, training, and rehabilitation costs for a dependent with a disability. Section 80DDB covers actual treatment costs for specified illnesses like cancer or chronic kidney failure, for the taxpayer or a dependent.
Has Section 80D been renamed under the new tax law?
Yes. Under the Income Tax Act, 2025, effective April 1, 2026, Section 80D has been renumbered as Section 126. The deduction limits and conditions remain unchanged, only the section reference has changed.
Last Updated on 1 week ago by Team Paisaseekho
