Section 80D Deduction Limit for Health Insurance in FY 2024-2025
Nimisha Panda- Apr 14
- 9 min read
Updated: Apr 29
Health insurance premiums can offer significant tax relief under Section 80D of the Income Tax Act, but the deduction limits vary based on the age of the insured and their relationship to the taxpayer. This section allows individuals and Hindu Undivided Families (HUFs) to claim deductions on premiums paid for medical insurance covering themselves, their families, and dependent parents. For the financial year 2024–25, understanding the precise limits and eligible scenarios is essential to maximize your tax-saving potential—especially as healthcare expenses continue to rise.
Table of Contents
What Is Section 80D of the Income Tax Act?
Section 80D offers a tax deduction for premiums paid towards health insurance policies. It applies to policies covering the taxpayer, their spouse, dependent children, and parents. The provision also includes deductions for preventive health check-ups and premiums paid for senior citizens.
Unlike other tax-saving provisions like Section 80C, which cover a wide range of investments, Section 80D is solely dedicated to healthcare-related expenses. This makes it a targeted benefit designed to encourage financial protection against medical emergencies.
Is Section 80D Deduction Allowed in New Tax Regime?
No, the Section 80D deduction is not available under the new tax regime.
The new regime, introduced under Section 115BAC, offers reduced tax rates but withdraws most exemptions and deductions, including those under Section 80D. Taxpayers opting for the new regime cannot claim deductions for health insurance premiums, preventive check-ups, or medical expenses for senior citizens.
Those seeking to benefit from Section 80D must continue filing under the old tax regime.
How Section 80D Works in Old Tax Regime
The old tax regime permits taxpayers to reduce their taxable income by claiming deductions under various sections, including Section 80D. Here’s how it applies:
Individuals below 60 years can claim up to ₹25,000 annually for health insurance premiums paid for self, spouse, and dependent children.
An additional deduction of ₹25,000 is allowed for insurance premiums paid for parents below 60 years.
If parents are aged 60 or above, this additional deduction rises to ₹50,000.
A further inclusion of up to ₹5,000 is permitted for preventive health check-ups, but this falls within the above overall limits.
The total benefit can go up to ₹1,00,000 if both the taxpayer and parents are senior citizens.
Deduction Limits for Individuals and Families Below 60 Years
For taxpayers below 60 years of age, Section 80D offers a deduction of up to ₹25,000 in a financial year. This limit applies to premiums paid for health insurance covering the individual, their spouse, and dependent children.
Included within this ₹25,000 cap is a maximum of ₹5,000 that can be claimed for preventive health check-ups. However, this ₹5,000 is not over and above the ₹25,000 limit—it’s part of it.
To be eligible, the policy must be in the name of the taxpayer or their family members and the premium must be paid through any mode other than cash (except for health check-ups, where cash payments are allowed).
Deduction Limits for Senior Citizens Under Section 80D
The deduction limit increases substantially for individuals aged 60 years or more. Taxpayers paying health insurance premiums for themselves, their senior citizen spouse, or their senior citizen parents can claim up to ₹50,000 annually under Section 80D.
This higher limit acknowledges the elevated cost of medical care for older individuals. If both the taxpayer and their spouse are senior citizens, the total claimable deduction rises accordingly within the ₹50,000 threshold.
As with all other 80D claims, payments must be made through non-cash modes, with preventive health check-ups included within the overall limit.
Combined Deduction Scenarios: Parents and Self with Age Variations
When policies cover both the taxpayer’s immediate family and their parents, the total deduction limit under Section 80D depends on the age group of each insured party:
Self and Family Below 60 + Parents Below 60The taxpayer can claim ₹25,000 for self and family, and an additional ₹25,000 for parents, totaling ₹50,000.
Self and Family Below 60 + Parents Above 60The taxpayer gets ₹25,000 for self and family, and ₹50,000 for senior citizen parents, totaling ₹75,000.
Self and Family Above 60 + Parents Above 60If both groups fall into the senior citizen category, the taxpayer can claim ₹50,000 for each, totaling ₹1,00,000 in deductions.
These combinations help taxpayers optimize deductions based on the age of the insured and the relationship hierarchy.
Preventive Health Check-up Deduction Under Section 80D
Section 80D allows a deduction of up to ₹5,000 annually towards preventive health check-ups. This benefit is available for expenses incurred on check-ups of self, spouse, dependent children, and parents. However, the ₹5,000 is not an additional benefit, it is included within the overall limit of ₹25,000 or ₹50,000, depending on the age category of the insured individuals.
These check-ups do not require a formal insurance policy. Even standalone diagnostics qualify, provided they are within the financial limits of Section 80D and pertain to eligible family members.
Who Can Claim Section 80D Deduction?
The benefit under Section 80D is available to individuals and Hindu Undivided Families (HUFs). Salaried employees, self-employed professionals, and pensioners, all can claim this deduction if they have paid for qualifying health insurance premiums or preventive check-ups.
Resident and non-resident taxpayers alike are eligible, as long as the payment is made in India and the policy covers permitted relatives, such as spouse, dependent children, and parents. In the case of HUFs, any premium paid for a member of the family qualifies.
Payment Modes Eligible for 80D Tax Benefit
To claim a deduction under Section 80D, the premium must be paid using non-cash methods. Accepted modes include debit or credit cards, internet banking, UPI, cheques, demand drafts, or digital wallets. Cash payments toward insurance premiums are not eligible for tax deduction.
An exception is made only for preventive health check-ups, those can be paid in cash and still qualify within the ₹5,000 sub-limit, as long as the overall cap isn't breached.
Common Mistakes to Avoid While Claiming 80D Deductions
Claiming for ineligible members: Deductions cannot be claimed for siblings, in-laws, or working adult children, even if premiums are paid for them.
Using cash for insurance premium payments: Only preventive health check-ups qualify for cash payment. All other premium payments must be made via banking channels.
Exceeding deduction limits: Many taxpayers assume ₹1,00,000 is universally allowed. Limits depend on age and who the insurance is for, misreporting can trigger notices.
Incorrect classification of parents: Classifying parents below 60 as senior citizens while claiming ₹50,000 can lead to rejection during assessment.
Including employer-paid premiums: If your employer pays for your health insurance and it’s not included as a taxable perquisite, no deduction can be claimed.
Ignoring split payments: If multiple family members contribute toward the same policy, only the payer is eligible to claim the deduction.
Forgetting to bifurcate preventive health check-up limits: The ₹5,000 limit is not over and above the ₹25,000 or ₹50,000, it’s part of it.
Claiming for non-dependent parents: Only dependent parents are covered under this benefit.
Skipping proper documentation: Lack of premium receipts or policy documents during filing may lead to denial of deduction.
Latest Recommendations to Increase Section 80D Limits
With healthcare costs escalating year-on-year, financial planners and tax experts have urged a revision of existing limits under Section 80D. As of early 2025, industry-wide discussions propose the following changes:
Raising the ₹25,000 limit for individuals below 60 years to ₹50,000.
Increasing the ₹50,000 limit for senior citizens to ₹75,000.
Enhancing the preventive health check-up cap from ₹5,000 to ₹10,000.
These recommendations aim to realign tax deductions with inflation-adjusted healthcare realities. While they have not yet been implemented, taxpayers are advised to track upcoming Budget announcements for potential revisions.
Conclusion
Section 80D remains one of the most practical and impactful tools for reducing tax liability while securing health coverage for self and family. Knowing the right limits, payment methods, and eligible relationships ensures the deduction is claimed correctly. As medical costs continue to rise, both policyholders and financial advisors are pushing for higher caps to keep this benefit relevant and effective in real-world scenarios.
FAQs
1. What is the maximum 80D deduction limit for a senior citizen?
Under Section 80D, a senior citizen—defined as an individual aged 60 years or above—is eligible for a deduction of up to ₹50,000 annually for health insurance premiums. This limit applies whether the policy covers the senior citizen themselves or their senior citizen parents. For example, if a 65-year-old taxpayer buys a policy for himself, he can claim ₹50,000. If he buys it for his 70-year-old mother, the same limit applies for that policy as well.
2. Can premium payments for siblings be claimed under Section 80D?
No. The scope of Section 80D is limited to premiums paid for self, spouse, dependent children, and parents. Even if a sibling is financially dependent, the deduction cannot be claimed. For instance, paying the premium for a younger brother’s health insurance won’t qualify for deduction, even if he doesn’t have a source of income.
3. Is cash payment eligible for claiming 80D deduction?
Generally, no. Section 80D allows deductions only if the health insurance premium is paid through banking channels, cheque, debit card, credit card, UPI, or net banking. The only exception is for preventive health check-ups. A deduction of up to ₹5,000 can be claimed even if the payment is made in cash, provided it falls within the total 80D limit.
4. Can NRIs claim health insurance deductions under 80D?
Yes, Non-Resident Indians are entitled to claim deductions under Section 80D if they pay health insurance premiums for eligible relatives—such as their spouse, children, or parents—and file taxes in India. The policy must be issued by an Indian insurer and the premium paid in Indian currency from taxable income earned in India.
5. Is preventive health check-up deduction separate from insurance premium?
Not entirely. A deduction of up to ₹5,000 is allowed for preventive health check-ups, but this amount is part of the overall 80D limit (i.e., ₹25,000 or ₹50,000 depending on age). For example, if you spend ₹23,000 on premiums and ₹4,000 on health check-ups, you can claim a total of ₹25,000—no additional benefit is given beyond the upper limit.
6. What if both parents and self are above 60 years?
In such cases, a taxpayer can claim up to ₹1,00,000 as a total deduction under Section 80D. That’s ₹50,000 for self and family (as the taxpayer is also a senior citizen) and another ₹50,000 for insuring senior citizen parents. This is the maximum combined benefit possible under the section.
7. Can deduction be claimed for multi-year premium payments?
Yes, if a lump sum premium is paid for a multi-year policy (such as a 2 or 3-year plan), the deduction must be spread evenly across the policy term. For example, if ₹36,000 is paid for a 3-year policy, ₹12,000 can be claimed each year under Section 80D, subject to the annual limit.
8. Is 80D applicable to corporate group health insurance premiums?
Only partially. If the employer pays the full premium under a group health insurance policy, the employee cannot claim any deduction. However, if the employee contributes voluntarily, such as opting for extra coverage or adding family members by paying an additional premium, that portion is eligible for deduction under Section 80D.
9. Can premiums paid for in-laws be claimed under 80D?
No. Premiums paid for father-in-law or mother-in-law do not qualify for 80D deduction, even if they are dependent on the taxpayer. Only spouses, dependent children, and parents (of the taxpayer) are considered eligible relatives for this benefit.
10. Does 80D allow deductions for top-up or super top-up health plans?
Yes. Premiums paid for valid top-up and super top-up health insurance policies are allowed as deductions under Section 80D. These policies provide additional coverage beyond the base plan and are treated the same as regular health insurance policies, provided they are health-related and issued by IRDAI-recognized insurers.
11. Is GST on premium included in the deductible amount?
Yes, the deduction allowed under Section 80D includes the entire premium amount paid—this covers base premium plus Goods and Services Tax (GST). For example, if the base premium is ₹22,000 and GST is ₹3,960, the total ₹25,960 is eligible for deduction, as long as it stays within the applicable limit.
12. What happens if policy is taken in the name of a non-dependent?
The deduction cannot be claimed if the policy is taken for a person who is not a defined relative under Section 80D. For instance, paying a premium for a friend, cousin, or financially independent child does not qualify. The beneficiary must be either self, spouse, dependent child, or parent to avail the benefit.
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