Section 80D is the provision in the Income Tax Act that lets you reduce taxable income by the amount you spend on health insurance premiums and preventive health check-ups. It applies under the old tax regime and is one of the most straightforward deductions available to individual taxpayers.
Deduction limits
| Who is covered | Maximum deduction | If the insured is a senior citizen (60+) |
|---|---|---|
| Self, spouse and dependent children | Rs 25,000 | Rs 50,000 |
| Parents | Rs 25,000 | Rs 50,000 |
If both you and your parents are below 60, the combined ceiling is Rs 50,000. If your parents are senior citizens and you are not, you can claim up to Rs 75,000. If all of you are senior citizens, the ceiling stretches to Rs 1,00,000.
An additional Rs 5,000 for preventive health check-ups is included within, not on top of, the above limits.
What qualifies
- Premiums on a health insurance policy for self, spouse, dependent children and parents.
- Contribution to the Central Government Health Scheme or similar notified scheme.
- Preventive health check-up expenses up to Rs 5,000.
- Expenditure on medical treatment of a senior citizen who does not have health insurance, up to Rs 50,000.
What does not qualify
- Premiums paid in cash do not qualify. Payment must be by cheque, online transfer, UPI or card. The one exception is preventive health check-up, which can be paid in cash.
- Employer-paid group health insurance does not earn you a personal deduction. Only the amount you pay from your own pocket counts.
Section 80D and the new tax regime
If you have opted for the new tax regime, Section 80D deduction is not available. This is one of the key trade-offs: the new regime offers lower slab rates but removes most deductions including 80C and 80D. Run both scenarios in our Income Tax calculator to see which regime gives you a lower liability.
Practical advice
Health insurance is not just a tax-saving instrument. A single hospitalisation can consume years of savings. The Section 80D benefit simply makes it cheaper to buy cover you need anyway.
If you have dependent parents who are senior citizens, insuring them under a separate policy and claiming the additional deduction is both a financial safety net and a meaningful tax saving.
Compare Section 80D with Section 80C when planning deductions. Both operate independently, so you can claim the full limit of each. Together, they can reduce taxable income by Rs 2 lakh or more under the old regime.