Tax, GST and company law glossary

Section 80D

A deduction for health insurance premiums and preventive check-ups for yourself, your family and your parents.

In short

The limit is ₹25,000 for self and family (₹50,000 if a senior citizen), plus a similar amount for parents. It is available only under the old regime.

What it means

Section 80D gives a deduction for health insurance premiums and preventive health check-ups paid for yourself, your spouse, dependent children and your parents. It encourages families to buy medical cover by reducing their taxable income. The deduction is available only under the old tax regime.

How it works

There are two separate limits, one for your own family and one for your parents, and they add up.

  • Self, spouse and children: up to ₹25,000 a year, or ₹50,000 if you or your spouse is a senior citizen (60 years or more).

  • Parents: a further ₹25,000, or ₹50,000 if either parent is a senior citizen. Parents need not be dependent on you.

  • Preventive health check-up: up to ₹5,000 in total, which is included within the above limits, not in addition to them.

  • Senior citizens without insurance: medical expenditure up to ₹50,000 can be claimed instead of a premium.

  • Maximum possible deduction is ₹1,00,000 where you and your parents are all senior citizens.

Premiums must be paid by any mode other than cash. Only the preventive check-up can be paid in cash. Where a multi-year policy is paid upfront, the deduction is spread equally over the policy years.

Example

Anil, aged 45, is in the 30% slab under the old regime. During the year he pays:

  • Family floater premium for self, wife and son: ₹22,000

  • Health check-up for the family: ₹5,000

  • Premium for his parents, both above 60: ₹48,000

  1. Own family claim = ₹22,000 + ₹5,000 = ₹27,000, capped at ₹25,000.

  2. Parents claim = ₹48,000, within the ₹50,000 senior citizen limit.

  3. Total deduction = ₹25,000 + ₹48,000 = ₹73,000.

  4. Tax saving = ₹73,000 x 30% = ₹21,900, plus 4% cess of ₹876, a total of ₹22,776.

Key points to remember

  • Section 80D is not allowed under the new tax regime.

  • Cash payment of premium is not allowed. Pay by card, UPI, net banking or cheque.

  • The ₹5,000 check-up limit sits inside the main limit, a common error in claims.

  • Premium for in-laws, siblings or grandparents is not eligible.

  • If your employer pays a group policy and you do not pay anything, you cannot claim that premium.

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