Short answer: Under Section 80D of the Income Tax Act, you can claim a deduction of up to ₹1,00,000 a year on the health insurance premiums you pay — ₹25,000 for yourself and your family (₹50,000 if any of you is a senior citizen), plus another ₹25,000 to ₹50,000 for your parents. There's one important catch most ads skip over: this deduction is available only if you file under the old tax regime. If you're on the new regime — which is now the default — you don't get it.
We'll walk through exactly what you can claim, who qualifies, the conditions that trip people up, and how to work out whether 80D actually saves you money. And because we're an advisory, not a tax salesperson, we'll be honest about when the tax saving shouldn't be the reason you buy at all.
A quick note on our role. MITRA is an insurance advisory (IRDAI Reg. No. CA0785), not a tax consultant. This guide is educational. Tax outcomes depend on your personal situation, so please confirm the specifics with a qualified Chartered Accountant before you file.
What is Section 80D?
Section 80D is the part of the Income Tax Act that lets an individual (or a Hindu Undivided Family) reduce their taxable income by the amount they spend on health insurance premiums and certain preventive and medical expenses. In plain terms: the government wants more people insured, so it lets you subtract those premiums from the income you're taxed on.
It sits separately from Section 80C (the ₹1.5 lakh bucket for life insurance, ELSS, PPF and the like). So an 80D deduction is over and above your 80C limit — the two don't eat into each other.
Heads up on section numbers. The Income Tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered things: Section 80D is now Section 126. The limits and rules are identical — only the number changed. We use "80D" throughout because that's what everyone still searches for and what your insurer's receipt will reference.
How much can you claim? The 80D limits for FY 2026-27
The amount depends on who is covered and their ages. Every row below already includes the ₹5,000 preventive health check-up sub-limit — so if your premium plus check-up spend stays within the row total, you can claim the whole thing.
| Who is covered | If everyone is under 60 | If a senior citizen (60+) is covered |
|---|---|---|
| Self + spouse + dependent children | Up to ₹25,000 | Up to ₹50,000 |
| Parents (dependent or not) | Additional ₹25,000 | Additional ₹50,000 |
| Maximum you can claim | ₹50,000 | ₹1,00,000 |
A few things worth understanding from this table:
- "Family" here is narrow — spouse and dependent children only. Parents are a separate bucket, which is why the two rows add up.
- The senior-citizen limit kicks in if even one insured person in that bucket is 60 or older.
- The absolute ceiling of ₹1,00,000 applies when you're a senior citizen and you're paying for senior-citizen parents.
A worked example
Rohan (38) pays ₹22,000 for a family floater covering himself, his wife and their child. He also pays ₹40,000 for a separate policy for his 66-year-old mother, and spends ₹6,000 on a preventive health check-up for his family.
- Self + family bucket: ₹22,000 premium + ₹3,000 of the check-up = ₹25,000 (capped at the ₹25,000 limit; the remaining ₹3,000 of check-up spend can't be claimed here).
- Parents bucket: ₹40,000 premium — well within the ₹50,000 senior-citizen limit = ₹40,000.
- Total 80D deduction: ₹65,000.
If Rohan is in the 30% tax slab under the old regime, that ₹65,000 deduction lowers his tax by roughly ₹19,500 (plus cess).
The catch nobody puts in the headline: old regime vs new regime
Here's the part that matters more than any limit. Section 80D only works under the old tax regime.
For FY 2026-27, the new tax regime remains the default. It offers lower slab rates and a rebate that makes income up to ₹12 lakh effectively tax-free — but in exchange, it removes most deductions, including 80C, 80D and HRA. Budget 2026 left these slabs and rebates unchanged, so this trade-off still stands for FY 2026-27.
So the real question isn't "how much does 80D save me?" It's "which regime leaves me better off overall?"
| Old regime | New regime (default) | |
|---|---|---|
| Section 80D deduction | ✅ Available | ❌ Not available |
| Section 80C (₹1.5 lakh) | ✅ Available | ❌ Not available |
| Slab rates | Higher | Lower |
| Rebate makes tax nil up to | ₹5 lakh | ₹12 lakh |
| Best for | People with large deductions (80C + 80D + home-loan interest + HRA) | People with few deductions, or income near/under ₹12 lakh |
A rough rule of thumb from tax practitioners: if your total deductions across 80C, 80D, home-loan interest, HRA and NPS comfortably exceed roughly ₹3.75–4 lakh, the old regime often wins. Below that, the new regime's lower slabs usually come out ahead — even without the 80D deduction. Run both numbers before you decide; don't switch regimes just to claim 80D.
The honest advisor's point: buy health cover because a hospital bill can wipe out years of savings — not because of the tax break. If the tax deduction happens to apply, treat it as a bonus, not the reason.
The 2025 GST change — a separate, real saving
This one is easy to confuse with the income-tax deduction, so let's keep it clean.
From 22 September 2025, the GST on individual health insurance premiums (including family floater and senior-citizen plans) was reduced from 18% to 0%, following the 56th GST Council meeting. This is a government-notified change, not an insurer offer.
What it means in rupees: a ₹10,000 premium that used to cost ₹11,800 after 18% GST now costs ₹10,000. You save the ₹1,800 straight away, regardless of which tax regime you're on.
Two things to note:
- This applies to individual policies. Group/employer health cover still attracts 18% GST.
- It reduces your bill. It is not a Section 80D deduction and doesn't change your 80D limits.
So an individual policyholder now gets a cheaper premium and, if on the old regime, an 80D deduction on top. Both are real; they're just two different benefits.
Conditions and common mistakes
A deduction you can't actually claim is worse than no deduction, so watch these:
- Cash premiums don't qualify. Pay by UPI, card, cheque or net banking and keep the statement. (The one exception: the preventive health check-up amount can be paid in cash.)
- Someone else's policy, paid by you. You can claim only if you paid the premium and the covered person is you, your spouse, dependent children or parents. You can't claim for premiums your employer paid, or for a sibling's or in-law's policy.
- Top-up and super top-up plans count. They're treated the same as base health plans under 80D.
- Filed under the wrong regime by mistake? Salaried taxpayers can generally switch regimes each year at filing; a revised return may be possible within the deadline. This is exactly the kind of thing to check with a CA.
Common misconceptions
"Health insurance is fully tax-free." No. Only the premium gives a deduction (under the old regime), within limits. The payout at claim time is a different matter entirely and depends on the policy.
"80D and 80C are the same pot of money." They're separate. 80C (₹1.5 lakh) covers life insurance, PPF, ELSS and more; 80D is an additional bucket for health premiums.
"The senior-citizen limit means my whole family gets ₹50,000." The higher limit applies to the bucket that includes a senior citizen. Your self-and-family bucket and your parents' bucket are assessed separately.
"I'm on the new regime, so my premium is wasted." Your tax deduction is gone under the new regime — but your cover still protects you, and you still benefit from the 0% GST. The insurance value doesn't disappear; only the deduction does.
How to claim your Section 80D deduction
- Pay premiums non-cash and save the receipts and bank statements.
- Collect your insurer's 80D certificate, which splits the premium by insured person and age band.
- Choose the old regime at filing (salaried employees typically declare this to their employer at the start of the year; the exact form has been renumbered under the 2025 Act, so check the current one).
- Enter the amounts under the health-insurance deduction schedule in your ITR, keeping self/family and parents separate.
- Keep documents for your records in case of any query from the tax department.
Where MITRA fits in
We're an advisory, so our job runs in two halves.
Before you buy, a MITRA advisor helps you pick a health plan that genuinely fits your family — the right sum insured, sensible room-rent terms, the network hospitals near you — and, if it's relevant to you, flags where 80D and the 0% GST leave you. No pressure, no fear-selling, no product we've been told to push.
After you buy — the part most websites go quiet about — a dedicated claim expert handles your claim end to end: preparing and checking documents, coordinating with the hospital and the insurer or TPA, chasing queries, and explaining the final settlement in plain language. That support is free for the life of your policy. A tax deduction is nice; a claim that actually gets settled when a family member is in hospital is the thing that matters.
Explore health insurance with MITRA, or see how our claims support works.
This article is for general education and does not constitute tax or investment advice. Limits, section numbers and rules are based on the Income Tax Act (as amended, including the Income Tax Act, 2025) and Government of India notifications current for FY 2026-27; tax law can change. Please consult a qualified Chartered Accountant for advice specific to your situation.
Related reading
- Health insurance — the complete guide
- Super top-up health insurance, explained
- How health insurance claims work
- Tax benefits of term insurance (80C, 80D, 10(10D))
Sources: Income Tax Act (1961 & 2025), Section 80D / Section 126; Central Board of Direct Taxes; Ministry of Finance, Department of Financial Services notification on GST exemption for individual life & health insurance (effective 22 September 2025); Union Budget 2025 & 2026.
Frequently asked questions
How much tax can health insurance save under Section 80D?
Up to ₹1,00,000 in deductions per year — ₹25,000 (or ₹50,000 for senior citizens) for yourself and your family, plus ₹25,000 (or ₹50,000) for your parents. The actual tax saved depends on your slab; at 30%, a ₹1,00,000 deduction saves about ₹30,000 plus cess. This applies only under the old tax regime.
Is Section 80D available under the new tax regime?
No. The new tax regime, which is the default, does not allow the 80D deduction. You'd need to opt for the old regime to claim it.
Can I claim 80D for my parents' health insurance?
Yes, if you pay the premium. You get an additional deduction of up to ₹25,000 (or ₹50,000 if a parent is a senior citizen), separate from your own ₹25,000/₹50,000 limit.
Does a preventive health check-up qualify under 80D?
Yes, up to ₹5,000 — but it's included within your existing 80D limit, not added on top. This is the one 80D item you may pay in cash.
Do top-up and super top-up plans get the 80D deduction?
Yes. Top-up and super top-up health plans are treated the same as base health insurance for Section 80D.
Did the section number change?
Yes. Under the Income Tax Act, 2025 (in force from 1 April 2026), Section 80D is renumbered as Section 126. The limits and rules are unchanged.
Is the premium cheaper now because of the GST change?
For individual policies, yes. From 22 September 2025, GST on individual health premiums is 0% (previously 18%), so your premium is lower. This is separate from the 80D income-tax deduction. Group/employer policies still carry 18% GST.
Can I claim 80D if I paid the premium in cash?
No — health insurance premiums must be paid in a non-cash mode to qualify. Only the preventive health check-up portion can be in cash.
