Section 80D of Income Tax Act: Deductions Under Medical Insurance, Limit, Eligibility And Policies

Section 80D allows taxpayers to claim a deduction on health insurance premiums paid for themselves and their family members. Under Section 80D of the Income Tax Act, individuals and Hindu Undivided Families (HUFs) can claim deductions of up to Rs. 25,000 for insurance covering self, spouse, and children, and up to Rs. 50,000 for senior citizens. An additional deduction of up to Rs. 5,000 is available for preventive health check-ups within the overall limit.

However, deductions under Section 80D are available only under the old tax regime. Taxpayers opting for the new regime cannot claim this deduction.

What is Section 80D?

Section 80D provides a tax deduction on health insurance premiums and certain medical expenses paid during a financial year. Individuals or HUFs can claim a deduction under this section. Taxpayer can claim deduction on health insurance premium paid for

• Self
• Spouse 
• Dependent children 
• Parents

You can also claim a deduction for preventive health check-ups and top-up health plans, subject to specified limits.

Section 80D Deduction Limits

The deduction under Section 80D is separate from and over the Rs. 1.5 lakh deduction available under Section 80C of the Income Tax Act.

Preventive health checkups of up to ₹5,000 are included within these limits. And under this section, family includes only the spouse and dependent children.

Expenses eligible for Deduction under Section 80D

1. Health insurance premiums

• Premium paid on health insurance, can be claimed as far as it is paid in any mode other than cash. 
• The amount should be actually paid within the end of the financial year. Amount due for the financial but still unpaid cannot be claimed as a deduction.

2. Medical expenses

• For senior citizens who do not have any health insurance, deduction can be claimed on actual expenses paid within the ceiling limit. 
• Expenses not covered under the insurance, for whatever reasons, cannot be claimed as a deduction, since it is paid while an insurance premium is also paid.

3. Preventive health check-up

• Preventive health check-up is eligible for 80D deduction in order to encourage senior citizens to be more health aware. 
• Up to Rs. 5,000 can be claimed as a deduction and The payment for preventive health check-ups can be made in cash.

Mode of Payment Under Section 80D

For claiming such deduction under section 80D, the payment has to be made in the specified mode:

Example of Section 80D Deduction

Rahul has paid a health insurance premium of Rs 23,000 for the health insurance of his wife and dependent children in the financial year 2025-26. He also had a health check-up done for himself and has paid Rs 5,000. For his father, he pays a health insurance amount of Rs 35,000.

Answer:

Rahul can claim a deduction of Rs 75,000 under Section 80D of the Income Tax Act. 

Rs 23,000 has been allowed towards the insurance premium paid, and Rs 2,000 has been allowed for a health check-up. The deduction towards preventive health check-ups has been restricted to Rs 2,000 as the overall deduction cannot exceed Rs 25,000 in this case. For his parents health insurance he can claim the entire Rs 35,000 as it is within the ceiling limit of Rs 50,000.

Below is a summary image explaining the provisions under section 80D.

Is Section 80D allowed under the new tax regime?

No. Deductions under Section 80D of the Income Tax Act are available only under the old tax regime. Taxpayers who opt for the new tax regime cannot claim deductions for health insurance premiums or preventive health check-ups under this section.

Multi-year Health Insurance Premium Paid in Lump-sum

• Sometimes, people buy multi-year health insurance plans because of the discounts offered. 
• For this they pay the premium amount upfront for all the years. 
• In this case, deduction is allowed proportionately under section 80D. 
• However, this would again be subject to the limits of Rs 25,000 of Rs 50,000 as discussed above.  
• Example: Mr. A bought 2-year health insurance policy and paid Rs 30,000 upfront. In this case, Mr. A can claim Rs 15,000 as deduction under Section 80D in each of the two years. 

Points to Remember while Purchasing Medical Insurance for Claiming 80D Deductions

• A medical insurance premium paid for a brother, sister, grandparents, aunts, uncles or any other relative cannot be claimed as a deduction for taking tax benefits.
• Premium paid on behalf of working children cannot be taken for tax benefit.
• In the case of part payment by you and a parent, both of you can claim a deduction to the extent paid by each.
• The deduction must be taken without showing the service tax and cess portion from the premium amount.
• Group health insurance premium provided by the company is not eligible for deduction.
• Premium paid by any mode other than cash is allowed for deduction. Hence premium paid by credit card or other online mode is also allowed for deduction.

Final Word

Section 80D is an attractive deduction, which allows the taxpayers to claim deduction on a very essential and crucial expense ,medical insurance premium. This does not require deliberate investments planning and altering your financial goals, thus making it a very popular deduction among the taxpayers.