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Tax Benefits of Individual Health Insurance Under Section 80D

Roocha KanadeDec 11, 2025

People buy health insurance to get financial protection for medical expenses but it is not limited to this. Buying an individual health insurance plan will also help you get tax benefits under section 80D of the Income Tax Act. Moreover, health insurance does not offer one single, limited tax benefit. It can increase based on the age of who is insured under the plan. In this article, you will find simple explanations on how tax benefits work for individual health insurance in India.

"Illustration showing a tax calculator and coins being saved into a piggy bank with a medical cross, representing the tax benefits of individual health insurance under Section 80D."

Contents

What is Section 80D in Income Tax Act
How Much Tax Deduction Can You Claim Under Section 80D for Individual Plans
- Section 80D Deduction Limits
Example Scenarios of Section 80D Tax Savings for Individual Health Policy
Conditions to Claim Tax Benefits on Individual Health Insurance
How to Claim Section 80D Deduction While Filing IT Returns
What Is Not Eligible for Tax Benefits Under Section 80D?
Conclusion
Frequently asked questions

What is Section 80D in Income Tax Act

Section 80D allows taxpayers in India to claim deductions on health insurance premiums. Think of it as the government’s way of encouraging everyone to stay insured. The deduction is available for policies purchased for yourself, your spouse, your dependent children, and your parents. The rule is simple. If you pay the premium through a digital or non-cash mode, you can claim the deduction for that financial year.

Section 80D applies to all individuals and Hindu Undivided Families, and it covers both new policies and renewed ones. The policy must be issued by an insurer approved by the Insurance Regulatory and Development Authority of India.

How Much Tax Deduction Can You Claim Under Section 80D for Individual Plans

The deduction limits under Section 80D depend on who you are paying the premium for and their age. Here is a simple breakdown.

Section 80D Deduction Limits

Category	Maximum Deduction (₹)	Who It Covers
Self + Family (below 60)	₹25,000	Self, spouse, dependent children
Parents (below 60)	₹25,000	Additional benefit if you pay for them
Parents (above 60)	₹50,000	Higher deduction for senior citizens
Self (60+) + Parents (60+)	₹1,00,000	Combined ceiling
Preventive health check-up	₹5,000	Included within the above limits

Example Scenarios of Section 80D Tax Savings for Individual Health Policy

Let's look at some real-life examples to understand tax savings better.

Example 1: A 30-year-old pays ₹18,000 annually for an individual health insurance policy. Since the limit for self and family below 60 is ₹25,000, the entire ₹18,000 is eligible for deduction.

Example 2: A 40-year-old pays ₹20,000 for a family policy and ₹35,000 for a senior citizen parent. The total eligible deduction becomes ₹55,000. ₹20,000 falls under the self plus family limit, and ₹35,000 is claimed under the senior citizen parent limit. These benefits lower your taxable income while ensuring that you and your family stay protected.

You can also check the broader advantages of having a policy here: Benefits of Individual Health Insurance.

Conditions to Claim Tax Benefits on Individual Health Insurance

Here is a list of things that will help you understand the conditions for claiming tax on health insurance premiums.

The premium must be paid by the policyholder and not by an employer.
Payments should be made through online banking, card, UPI, or cheque. Cash payments do not qualify under Section 80D.
The policy should be issued by an insurer approved by the Insurance Regulatory and Development Authority of India.

You would need to submit the policy copy and payment details while filing your income tax returns. If you are buying a policy or enrolling for the first time, you can check the step-by-step process here: How to Enrol in Individual Health Insurance.

How to Claim Section 80D Deduction While Filing IT Returns

Here are the steps to claim your income tax returns.

Log in to your account on the Income Tax portal.
Choose the correct form, usually ITR-1 or ITR-2, based on your income category.
Go to the “Deductions and Exemptions” section.
Enter the amount you paid as premium under Section 80D.
Upload supporting documents only if the system requests verification.
Submit your return after confirming the details.

Note that you can only get tax benefits if the premium is paid in the corresponding financial year. It might not matter if your policy continues for the next financial year.

What Is Not Eligible for Tax Benefits Under Section 80D?

A few situations don’t qualify for 80D benefits, and knowing them early helps avoid mistakes.

Group-health premiums paid by your employer aren’t eligible for deduction.
Premiums paid in cash won’t be considered.
Policies from foreign insurers that are not IRDAI-approved don’t qualify.
Premiums paid after the financial year closes can’t be included.

Also read: Group Vs Individual Health Insurance Explained

Conclusion

Section 80D makes health insurance a doubly beneficial investment. You secure your family’s health and also enjoy meaningful tax savings. A bit of planning before paying your premium can help you make the most of this provision. Protect your family’s health and enjoy tax savings under Section 80D.