Worked Examples and Buying Checklists
Section 80D health insurance deduction: limits, worked examples and the Income-tax Act 2025
How the health insurance tax deduction works for self, family and parents, the 80D limits, old vs new regime, payment rules and how it continues under the Income-tax Act 2025.
Health insurance premiums give a tax deduction only if you file under the old tax regime. Under Section 80D of the Income-tax Act, 1961, you can deduct up to ₹25,000 a year for a policy covering yourself, your spouse and dependent children (₹50,000 if any of them is a senior citizen, aged 60 or over), plus a separate ₹25,000 for your parents (₹50,000 if either parent is a senior citizen). Preventive health check-ups count within these limits up to ₹5,000. The maximum is ₹1,00,000 when everyone is a senior citizen. The Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026 (tax year 2026-27), carries the same deduction forward under a new section number (reported as section 126; check the Act on the Income Tax Department's website). For income of the financial year 2025-26, filed in 2026, the 1961 Act and Section 80D still apply.
This guide is part of the health insurance buying checklist. Use the tax saving calculator to estimate your saving.
The limits
| Who is insured | Limit if no one in the group is 60+ | Limit if anyone in the group is 60+ |
|---|---|---|
| Self, spouse, dependent children | ₹25,000 | ₹50,000 |
| Parents (dependent or not) | ₹25,000 | ₹50,000 |
| Maximum total | ₹50,000 | up to ₹1,00,000 |
Within each limit:
- Preventive health check-up: up to ₹5,000 in total across both groups.
- Medical expenditure for a senior citizen with no health insurance: can be claimed within the ₹50,000 limit for that group.
- Contribution to the Central Government Health Scheme (CGHS) or other notified schemes counts in the self/family group.
Payment rules that trip people up
- No cash for premiums. Premium paid in cash does not qualify. Pay by bank transfer, card, UPI or cheque. A preventive health check-up can be paid in cash.
- Who pays matters. You claim for premiums you paid. If your parents' premium is paid from their own account, you cannot claim it.
- Siblings sharing parents' premium. Each can claim the part they actually paid, within the limits, if payment records show it.
- Multi-year policies. If you pay a 2- or 3-year premium in one go, the deduction is spread equally over the years of cover.
- Employer group cover. The employer's premium is not your deduction. Your own payment to add parents may qualify, but check the payroll certificate showing your contribution.
- GST. Individual policies have been GST-exempt since 22 September 2025, so the deduction is now simply the premium. See GST on health insurance.
Worked example 1: salaried, old regime
Illustrative. Neha, 37, salaried, opts for the old regime. Premiums paid by UPI in tax year 2026-27:
- Family floater for herself, husband (39) and son: ₹21,000
- Preventive check-up for herself, paid in cash: ₹3,500
- Senior citizen policy for her parents (66 and 62): ₹46,000
| Group | Paid | Limit | Deduction |
|---|---|---|---|
| Self and family (premium ₹21,000 + check-up ₹3,500) | ₹24,500 | ₹25,000 | ₹24,500 |
| Parents (seniors) | ₹46,000 | ₹50,000 | ₹46,000 |
| Total | ₹70,500 |
At a 30% slab plus 4% cess (31.2%), tax saved = ₹70,500 × 31.2% = ₹21,996. The ₹70,500 of health spending costs her about ₹48,504 after tax.
Worked example 2: which regime wins?
The deduction does not decide the regime choice by itself. Compare the total tax under both regimes with all your deductions (provident fund and other investment deductions, home-loan interest, HRA and so on). Many people with few deductions pay less under the new regime even after losing the health insurance deduction. The Income Tax Department's e-filing portal has a calculator to compare both regimes. If the new regime is cheaper for you overall, the health insurance deduction saves you nothing, and you should buy health cover for protection, not for tax.
Worked example 3: parents' policy split between siblings
Illustrative. Two brothers jointly pay ₹60,000 for their parents' policy (both parents over 60), each sending ₹30,000 to the insurer from their own accounts. Each can claim ₹30,000 under the parents' limit of ₹50,000, provided the receipt or bank statement shows each payment. If one brother pays the whole ₹60,000, his deduction is capped at ₹50,000; the other gets nothing.
What changed with the Income-tax Act, 2025
- The 2025 Act replaced the 1961 Act with effect from 1 April 2026. It uses a single "tax year" in place of the earlier "previous year" and "assessment year".
- The health insurance deduction continues with the limits and conditions described above as section 126 of the 2025 Act. Most guides and forms will refer to "80D" for some time.
- The choice between the old regime (with deductions) and the new regime (lower rates, few deductions) continues. Check the current rules for switching between regimes, which differ for people with business income.
- Returns for income earned before 1 April 2026 (FY 2025-26) are filed under the 1961 Act.
Because the new Act is recent, confirm the section number and any changes to conditions on the Income Tax Department website or with a tax adviser before filing.
Documents to keep
- Premium receipts showing the payer's name, mode of payment, insured persons and period of cover
- Check-up bills
- For parents, their ages (for the senior citizen limit)
- Employer payroll certificate for any contribution through the group policy
Related: insuring parents and senior citizens, individual vs floater.
Frequently asked questions
Can I claim for my in-laws?
No. The parents' limit is for your own parents. Your spouse can claim for their parents if your spouse pays the premium.
Can I claim a deduction for my adult working son's premium?
The self/family group covers dependent children. If your son is independent, he should pay and claim for himself.
Do super top-up premiums count?
Yes, they are health insurance premiums and count within the same limits.
Sources and where to check
- Income Tax Department — text of the Income-tax Act, 2025 and FAQs on deductions
- Income Tax e-filing portal — regime comparison calculator and return forms
- India Code — the official text of the Acts
