Section 80D of the Income Tax Act allows you to claim a tax deduction on premiums paid for health insurance policies. Unlike Section 80C, these deductions are over and above the \u20b91.5 lakh 80C limit, making them an additional tax-saving opportunity.
Deduction Limits Under Section 80D
- Premium for self, spouse, and children (below 60): Up to \u20b925,000
- Premium for parents (below 60): Up to \u20b925,000 (additional)
- Premium for parents (60+, senior citizens): Up to \u20b950,000 (additional)
- Self or spouse is a senior citizen: Up to \u20b950,000
- Maximum possible deduction (self + senior citizen parents): \u20b975,000 per year
Preventive Health Check-up
Within the above limits, you can also claim up to \u20b95,000 per year for preventive health check-up expenses for self, family, and parents. Cash payments are allowed for this component (unlike premium payments which must be non-cash).
Section 80D Under the New Tax Regime
Section 80D deductions are not available under the new tax regime. This is a significant factor for taxpayers who pay high health insurance premiums, making the old regime more attractive for them.
Points to Remember
- Premium must be paid by any mode other than cash (cheque, UPI, net banking)
- Group health insurance premium paid by employer is not eligible for 80D deduction
- Premium paid for in-laws is not eligible
- Medical reimbursement or critical illness riders may have different tax treatment
Practical Strategy
Buy a family floater for yourself + family (\u20b925,000 deduction) and a separate individual policy for your parents (\u20b925,000\u2013\u20b950,000 deduction). This alone can save \u20b915,000\u2013\u20b923,000 in taxes annually.
Use the SaveTaxNow Calculator to factor in your 80D deductions and compare old vs new regime.