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.
Anyone who pays health insurance premiums for themselves, their family, or their parents under the optional regime.
Scenario
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+).
Calculation
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.
Scenario
Retired Nalini (aged 62) pays ₹48,000 for her own health insurance. She has no parents to cover.
Calculation
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.
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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.