In today's world of rising medical costs and health risks, buying the right health insurance policy isn’t just good planning - it’s also smart tax strategy. Section 80D of the Income Tax Act offers generous deductions that go beyond the usual ₹1.5 lakh cap under Section 80C.
But to make the most of this benefit, you must understand what qualifies, who is eligible, and how to structure your policies correctly - especially under the old vs. new tax regimes.
With medical inflation rising at 12–15% annually, a routine hospitalization in a Tier 1 city can cost ₹3–6 lakhs. If you're unprepared, these costs can derail your savings goals or force emergency withdrawals from long-term investments.
Having a robust personal health insurance plan helps:
Most corporate group medical insurance policies:
Also, if your employer pays the premium, you can’t claim tax deductions. To claim Section 80D benefits, the premium must be paid from your own pocket - and via non-cash modes.
Recommendation: Always buy a separate personal/family floater policy, even if you're already covered at work.
Section 80D provides additional tax deductions for premiums paid towards health insurance, over and above the ₹1.5 lakh deduction allowed under Section 80C.
You can claim it for:
Covered Persons | Deduction Limit |
---|---|
Self + Family (all below 60) | ₹25,000 |
+ Parents (<60 years) | ₹25,000 |
+ Parents (≥60 years) | ₹50,000 |
Self + Family (anyone ≥60) + Parents (≥60) | ₹50,000 + ₹50,000 = ₹1,00,000 |
Preventive health check-up: Up to ₹5,000, included in the above limits
Multi-year premium: Can be split equally across policy tenure (e.g., 3-year policy = ⅓ per year)
If your senior citizen parents (age 60+) do not have insurance, you can still claim up to ₹50,000 for actual medical expenses incurred in the financial year.
This is only applicable if they don’t have any health policy.
Eligible Entities:
Allowed Payments:
Let’s say your father and you co-pay the premium for a senior citizen policy. You can both claim deductions separately under 80D - in proportion to what each paid.
Keep receipts showing the split payment clearly
Mention insurer name, policy number, and payment amount in your ITR
Deduction: Up to ₹5,000
Includes costs like:
This can be paid in cash and still qualifies - a rare exception under Section 80D.
If you have opted for the new tax regime, you are not eligible to claim deductions under Section 80D. All health insurance premiums (even if paid by you) will not reduce your taxable income.
Feature | Old Regime | New Regime |
---|---|---|
80D Deduction Allowed? | Yes | No |
Recommended for 80D? | Yes | No |
Best for? | Families with dependents and tax-saving investments | People with fewer deductions |
Generally, no - term insurance qualifies under Section 80C, not 80D.
Exception: If your term plan includes critical illness or hospital care riders, you can claim the portion of premium related to those riders under Section 80D.
Case: Dr. Anita (45) pays:
Eligible Deduction:
Total claimable = ₹58,000
If you’re filing as an HUF:
The claim is made in the HUF’s return, not an individual’s return.
Finnovate helps you compare policies, pick the right insurer, and claim the right deduction - without any sales pressure.
Book a Free Health Insurance Consultation
Let our team do the legwork - so you can focus on what matters.
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