Section 80D: Health Insurance Deduction Limits & Rules 2025
- PRITI SIRDESHMUKH
- 4 days ago
- 9 min read
Section 80D of the Income Tax Act, 1961, continues to provide one of the most valuable tax-saving avenues for individuals and Hindu Undivided Families (HUFs) in India. It allows deductions on health insurance premiums and medical expenses incurred for self, family, and parents. For FY 2024-25 (AY 2025-26), the deduction limits remain unchanged—₹25,000 for individuals and up to ₹1,00,000 when covering senior citizens. These provisions promote financial security through healthcare protection while easing tax burdens for Indian taxpayers.
Table of Contents
Understanding Section 80D of the Income Tax Act
Section 80D of the Income Tax Act, 1961, is a key provision that allows taxpayers to claim deductions for premiums paid toward health insurance and medical expenses. It applies to individuals and Hindu Undivided Families (HUFs) who pay premiums for themselves, their families, or their parents. The primary objective is to encourage citizens to secure health coverage while reducing their tax liability. The section also includes preventive health check-ups and medical expenditure for senior citizens without insurance. By promoting responsible financial planning, Section 80D serves both as a health safeguard and a tax-saving tool for FY 2024-25 (AY 2025-26).
Section 80D Deduction Limits for FY 2024-25 (AY 2025-26)
The deduction limits under Section 80D remain unchanged as per the Union Budget 2025. Individuals below 60 years can claim up to ₹25,000 for health insurance premiums covering self, spouse, and dependent children. If the taxpayer is a senior citizen aged 60 years or above, the limit increases to ₹50,000. Additionally, a separate deduction is allowed for premiums paid for parents—₹25,000 if parents are below 60, or ₹50,000 if they are senior citizens. Preventive health check-up expenses up to ₹5,000 are included within these limits. Thus, if both the taxpayer and parents are above 60, the total deduction can go up to ₹1,00,000.
Covered Person | Age | Maximum Deduction (₹) |
Self + Spouse + Dependent Children | Below 60 years | 25,000 |
Self + Spouse + Dependent Children | 60 years & above | 50,000 |
Parents | Below 60 years | 25,000 |
Parents | 60 years & above | 50,000 |
Preventive Health Check-up | Any age | 5,000 (within limit) |
Maximum if both self and parents are senior citizens | – | 1,00,000 |
Eligibility and Key Rules Under Section 80D
Only individuals and HUFs are eligible to claim deductions under Section 80D. The payments must be made through banking channels such as credit card, debit card, cheque, or net banking. Cash payments are not eligible except for preventive health check-ups. Deductions are allowed for policies covering self, spouse, dependent children, and parents. Policies covering siblings, in-laws, or non-dependent children do not qualify. The premium must be paid for a health insurance policy issued by an IRDAI-approved insurer. Premiums paid for top-up or critical illness riders are also included within the overall deduction limit.
Preventive Health Check-up and Medical Expenses
Preventive health check-ups form an integral part of Section 80D, allowing taxpayers to claim up to ₹5,000 within the overall limit. This benefit is designed to promote early diagnosis and regular health monitoring. Payments for preventive check-ups can be made in cash. In cases where senior citizens do not have a health insurance policy, actual medical expenses incurred for treatment can be claimed up to ₹50,000 under Section 80D. This ensures that elderly individuals without insurance still receive financial relief on their medical costs.
How Section 80D Works in the Old Tax Regime
Under the old tax regime, taxpayers can claim Section 80D deductions as part of the Chapter VI-A benefits. The deduction reduces the total taxable income, thereby lowering the overall tax burden. For example, if a 35-year-old individual pays ₹25,000 as a premium for family health insurance and ₹25,000 for parents under 60, they can claim a total deduction of ₹50,000. If both the taxpayer and parents are senior citizens, the deduction doubles to ₹1,00,000. This flexibility makes the old regime particularly beneficial for families prioritizing healthcare security and tax savings.
Is Section 80D Allowed in the New Tax Regime?
Under the new tax regime introduced in FY 2024-25, most deductions under Chapter VI-A, including Section 80D, are not available. Taxpayers opting for the new regime will pay tax at reduced slab rates but cannot claim health insurance deductions. Those who prefer maximizing exemptions, including 80D, must continue under the old regime. Therefore, individuals should evaluate their income structure and deduction potential before choosing between the two regimes for optimal tax efficiency.
Section 80D for Senior Citizens and NRIs
Senior citizens receive higher deduction limits under Section 80D, reflecting their increased healthcare needs. They can claim up to ₹50,000 for themselves and another ₹50,000 for parents if both are senior citizens. In cases where no insurance policy exists, medical expenses up to ₹50,000 can still be claimed. Non-Resident Indians (NRIs) are also eligible to claim Section 80D deductions for health insurance policies taken in India for themselves, their spouse, and dependent children, provided the policy is issued by an IRDAI-approved insurer and the premium is paid in Indian currency.
Documentation and Compliance Requirements for 2025
From Assessment Year 2025-26, taxpayers must provide specific details while claiming the Section 80D deduction. The insurer’s name and policy number must be disclosed in the Income Tax Return. Receipts for paid premiums and preventive health check-ups should be retained for verification. Payments must be traceable through valid banking modes, except for preventive check-ups that can be paid in cash. Maintaining organized records ensures smooth processing of deductions during tax filing and prevents potential discrepancies.
Latest Budget 2025 Updates and CBDT Notifications
The Union Budget 2025 did not introduce any changes in Section 80D deduction limits despite expectations of an increase due to rising healthcare costs. The CBDT issued updated compliance notifications mandating the inclusion of insurer details and policy numbers for accurate verification. These updates streamline the reporting process and align with the government’s move toward greater transparency in tax filings. Taxpayers are encouraged to ensure timely compliance with the latest requirements while filing their returns.
Common Exclusions and Mistakes to Avoid Under Section 80D
Several errors can lead to disallowance of Section 80D deductions. Premiums paid in cash (except for preventive check-ups), group insurance provided by employers, or payments made for siblings, in-laws, or non-dependent children are not eligible. Another common mistake is claiming deductions for premiums reimbursed by employers or third parties. Taxpayers should ensure the premium has been paid personally and not claimed elsewhere to avoid duplication. Maintaining proper documentation and verifying eligibility before filing prevents unnecessary scrutiny.
How TaxBuddy Simplifies Section 80D Deduction Filing
TaxBuddy simplifies the process of claiming deductions under Section 80D by automating data extraction and verification. Its AI-driven system identifies eligible deductions from uploaded documents like Form 16, policy receipts, and bank statements, ensuring accuracy and compliance. The platform also helps taxpayers distinguish between old and new regime benefits, making it easier to decide the most tax-efficient option. By combining automation with expert support, TaxBuddy ensures error-free, stress-free ITR filing for individuals and families across India.
Conclusion
Section 80D continues to be a vital provision for balancing tax savings with health security. It encourages individuals and families to stay insured while offering meaningful deductions to ease financial stress. As healthcare costs rise, optimizing Section 80D benefits becomes increasingly important for sound tax planning. For anyone looking for assistance in tax filing, it is advisable to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers both self-filing and expert-assisted ITR filing plans to suit different types of taxpayers. The self-filing plan is ideal for salaried individuals who want a quick and AI-supported experience. It allows users to upload documents like Form 16 and automatically fills in key fields to reduce manual effort and errors. The expert-assisted plan, on the other hand, is designed for those with more complex cases—such as capital gains, foreign income, or business income—where a qualified tax professional reviews and files the return. Both options ensure secure, accurate, and compliant tax filing with real-time updates.
Q2. Which is the best site to file ITR?
While the official Income Tax Department portal (incometax.gov.in) remains the statutory platform for filing returns, many taxpayers prefer private platforms that offer ease and automation. TaxBuddy is among the most trusted online filing platforms in India due to its AI-powered system that validates data, detects errors, and maximizes deductions automatically. Its interface is designed to make filing faster and more intuitive for both individuals and small businesses. For those seeking a blend of automation and expert review, TaxBuddy is often considered the best choice for ITR filing in 2025.
Q3. Where to file an income tax return?
Income tax returns can be filed online through the government’s official portal or through authorized platforms like TaxBuddy. TaxBuddy simplifies the process by guiding users step-by-step, ensuring all forms and schedules are filled accurately. It supports multiple ITR forms (ITR-1 to ITR-4), covers salaried, professional, and business incomes, and ensures compliance with the latest tax laws. For convenience, users can also file their returns through the TaxBuddy mobile app, which allows document uploads and real-time status tracking from anywhere.
Q4. What is the maximum deduction under Section 80D in 2025?
For FY 2024-25 (AY 2025-26), the maximum deduction under Section 80D is ₹1,00,000. This is applicable when both the taxpayer (self or family) and parents are senior citizens aged 60 years or above. In this case, the taxpayer can claim ₹50,000 for their own or family’s health insurance and an additional ₹50,000 for parents’ insurance or medical expenses. If neither party is a senior citizen, the total limit stands at ₹50,000 (₹25,000 + ₹25,000). Preventive health check-up expenses up to ₹5,000 can also be claimed within the overall ceiling.
Q5. Can preventive health check-ups be claimed in cash?
Yes, preventive health check-up expenses up to ₹5,000 can be paid in cash and claimed as part of the Section 80D deduction. However, this ₹5,000 is not an additional deduction; it is included within the overall limit of ₹25,000 or ₹50,000. These expenses must be supported by proper medical bills or receipts indicating the tests conducted. The purpose of this provision is to encourage early diagnosis and preventive care, promoting better health awareness among taxpayers.
Q6. Are medical expenses of uninsured senior citizens eligible under 80D?
Yes, Section 80D allows a deduction of up to ₹50,000 for actual medical expenses incurred on senior citizens who are not covered under any health insurance plan. This applies to expenses for self, spouse, or parents who are aged 60 years or above. The medical expenses can include doctor consultation fees, hospital bills, and prescribed medicines, provided they are supported by bills and paid through banking channels. This provision helps elderly individuals who find it difficult to obtain new health insurance coverage.
Q7. Can premiums paid for in-laws or siblings be claimed?
No, premiums paid for in-laws, siblings, or any other relatives not directly covered under the definition of “family” are not eligible for deduction under Section 80D. The eligible persons are limited to self, spouse, dependent children, and parents. Even if the taxpayer pays the premium for an in-law’s policy, the deduction cannot be claimed. It is therefore important to ensure that the insurance policy is taken in the name of eligible family members only.
Q8. Is Section 80D deduction available under the new tax regime?
No, taxpayers opting for the new tax regime under Section 115BAC cannot claim deductions under Section 80D. The new regime offers lower slab rates but does not allow most Chapter VI-A deductions, including 80C, 80D, and 80TTA. Those who wish to continue claiming health insurance premium deductions must stay under the old tax regime. Choosing the right regime should depend on income level, total eligible deductions, and tax-saving goals.
Q9. What documents are required for claiming the 80D deduction?
To claim a deduction under Section 80D, the taxpayer must maintain and provide the following documents if requested:
Premium payment receipts issued by the insurance company
Policy document showing the name of insured persons, insurer’s name, and policy number
Bank or card statement showing non-cash payment of the premium
Preventive health check-up receipts (if applicable) From AY 2025-26, taxpayers are also required to mention the insurer’s name and policy number in their ITR for verification. Proper documentation ensures smooth claim processing and prevents scrutiny during assessment.
Q10. Can NRIs claim deductions under Section 80D?
Yes, Non-Resident Indians (NRIs) can claim deductions under Section 80D for health insurance policies purchased in India for themselves, their spouse, dependent children, and parents. The insurance must be issued by an IRDAI-approved insurer, and the premium must be paid in Indian currency through a recognized banking channel. However, NRIs cannot claim deductions for policies purchased abroad or premiums paid in foreign currency. Maintaining proper records is essential for claim validation during ITR filing.
Q11. What happens if the premium payment is missed for one year?
If the taxpayer misses paying the premium for a particular financial year, the deduction under Section 80D cannot be claimed for that year. The benefit is available only for payments made during the relevant financial year, and advance or partial payments do not qualify unless they correspond to the same assessment period. Resuming payment in subsequent years allows the deduction to be claimed again, but missed years cannot be retrospectively adjusted.
Q12. Are top-up and critical illness premiums eligible for deduction under 80D?
Yes, premiums paid for top-up or critical illness health insurance plans are eligible for deduction under Section 80D, provided the total premium amount remains within the prescribed limit. These plans are considered extensions of health coverage and are designed to supplement existing insurance policies. The premium must be paid through a valid banking mode, and the policy should be issued by an IRDAI-recognized insurer. Including these plans can enhance medical protection while optimizing tax benefits under the same section.
