TaxSaral

Section 126 · was Section 80D in the 1961 Act

Health Insurance Premium

Deduction for medical insurance premium for self, spouse, children (₹25,000) and separately for parents (₹25,000; ₹50,000 if parents are senior citizens). Maximum combined ₹75,000.

Who it applies to: Anyone who pays health insurance premiums for themselves, their family, or their parents under the optional regime.

Key points

  • Two separate pools: self + family (up to ₹25,000) and parents (up to ₹25,000 or ₹50,000 for seniors).
  • If you are a senior citizen yourself, your own-insurance limit rises to ₹50,000.
  • Preventive health check-up costs (up to ₹5,000) are included within the above limits — not additional.
  • Premium must be paid by any mode other than cash to claim the deduction.

Worked examples

1. Family policy + senior citizen parents policy

Kavya (aged 38) pays ₹22,000 for a family floater (covering herself, husband, and kids) and ₹45,000 for a policy covering her parents (both aged 65+).

Self + family premium: ₹22,000 (limit ₹25,000) → ₹22,000 claimed
Parents premium: ₹45,000 (limit ₹50,000 for senior citizen parents) → ₹45,000 claimed

Total deduction: ₹22,000 + ₹45,000 = ₹67,000

Tax saved at 20% slab:
  ₹67,000 × 20% = ₹13,400
  Plus cess: ₹13,400 × 1.04 ≈ ₹13,936

Result: Kavya saves nearly ₹14,000 in tax. If she increased her family premium to ₹25,000 (the maximum), she would get the full ₹25,000 + ₹45,000 = ₹70,000 deduction — saving even more.

2. Self aged 60+ with no parents

Retired Nalini (aged 62) pays ₹48,000 for her own health insurance. She has no parents to cover.

Nalini is a senior citizen — her own-coverage limit is ₹50,000
Premium paid: ₹48,000 ≤ ₹50,000
Deduction: ₹48,000

Parents pool: not applicable

Tax saved at 5% slab: ₹48,000 × 5% = ₹2,400

Result: Nalini claims ₹48,000 deduction. Her being a senior citizen doubles the limit from ₹25,000 to ₹50,000 for her own health coverage.

Related sections

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Section references are based on the Income Tax Act 2025 (Tax Year 2026-27). Examples are illustrative; verify with a Chartered Accountant before filing.