Deduction for health insurance premiums for self, spouse and senior-citizen parents

The provision

Section 80D of the Income-tax Act, 1961 is section 126 of the Income-tax Act, 2025. An individual gets a deduction for premiums paid to keep in force health insurance on himself and his family (spouse and dependent children: section 126(10)(b)), and, separately, on his parents. It is allowed only under the old regime: under the default regime of section 202(1), no deduction under Chapter VIII other than a few specified ones is allowed. The premium must be paid otherwise than in cash (section 126(9)(b)), out of income chargeable to tax in the tax year (section 126(1)), and the health insurance must be under a scheme of the General Insurance Corporation of India approved by the Central Government, or of any other insurer approved by the Insurance Regulatory and Development Authority (section 126(11)).

Limits

The ₹25,000 limit in each clause is replaced by ₹50,000 where the person insured is a senior citizen (section 126(8)(a)). The two limits are separate, and each group's total, medical expenditure included, cannot exceed ₹50,000 (section 126(4)). Payments for preventive health check-ups are included within them, up to ₹5,000 in all (section 126(3)); unlike premiums, they may be paid in cash (section 126(9)(a)). Where a premium is paid in one lump sum in a tax year for cover of more than a year, only the appropriate fraction (one over the number of tax years the cover runs) is deductible in each of those years (section 126(8)(b), (10)(a) and (10)(c)).

Computation of the deduction for Mr. Ram (55 years) for tax year 2026-27

Notes

1. Mr. Ram is 55 and his spouse is taken to be below 60, so the self-and-spouse limit is ₹25,000; the ₹25,000 paid in excess is not deductible. The question does not give her age: if she is 60 or more and resident in India, the premium on her is paid for a senior citizen (section 2(100)), so section 126(8)(a) puts ₹50,000 in place of ₹25,000 for the self-and-family clause; the whole ₹50,000 paid is then deductible and the deduction is ₹1,00,000.
2. The parents' limit is raised to ₹50,000 because they are senior citizens; it is one limit for both parents together, not ₹50,000 each.
3. Had either parent been uninsured and a senior citizen (60 or more, section 2(100)), medical expenses on that parent would also fall within the same ₹50,000 limit (section 126(2)(d), (4) and (7)).
4. The premiums are read as paid otherwise than in cash, each for one year's cover. If not: a premium paid in cash is not deductible at all (section 126(9)(b)), so the deduction is nil if all of them were paid in cash. If every premium instead bought two years' cover in one lump sum, the deduction this year is the appropriate fraction: one over the number of relevant tax years, counted from the tax year of payment through each later tax year in which the cover remains in force (section 126(8)(b), (10)(a) and (10)(c)). Where the cover runs through two tax years (for example, from 1 April 2026 to 31 March 2028), that is half: ₹25,000 for self and spouse (half of ₹50,000) and ₹40,000 for the parents (half of ₹80,000), a deduction of ₹65,000. Where it begins during the year and so runs into a third tax year, it is one third: ₹16,666.67 for self and spouse (₹50,000 ÷ 3) and ₹26,666.67 for the parents (₹80,000 ÷ 3), a deduction of ₹43,333.33, both within the limits.