Section 80D (Health Insurance)

Section 80D of the Income Tax Act allows tax deductions for premiums paid towards health-insurance policies covering yourself, spouse, children, and parents. The deduction is separate from the Rs.1.5 lakh 80C limit and is one of the most under-utilized retail tax breaks.

Limits (FY 2024-25): Self + spouse + dependent children - up to Rs.25,000 (Rs.50,000 if any insured is 60+); parents (separate cap, regardless of dependency) - up to Rs.25,000 (Rs.50,000 if any parent is 60+). Within each limit, preventive health check-up gets a Rs.5,000 sub-limit.

Example: A 40-year-old pays Rs.22,000 for a family-floater covering self+spouse+kids, plus Rs.45,000 for parents aged 65+. Total 80D deduction = Rs.22,000 + Rs.45,000 = Rs.67,000 (well within Rs.25k + Rs.50k = Rs.75k combined cap). Saves Rs.20,800 in tax at 30% slab.

When to use: Every financial year you pay health-insurance premiums via traceable banking channels (cash payments are disallowed except for preventive check-ups). Critical for the 80C+80D+80CCD(1B) tax-saving trinity: Rs.1.5L + Rs.75k + Rs.50k = Rs.2.75 lakh maximum deduction stack.

Tax caveat: 80D is available ONLY under the OLD tax regime. If you opt for the NEW regime (default from FY24), you forgo this deduction. Always model both regimes before filing - the breakeven is around Rs.10-12 lakh income depending on your deduction profile.

Related: Section 80CCD (NPS), ELSS, LTCG, NRI.