In today’s time, taking health insurance is not just a medical necessity, it is also a part of smart financial planning. In the financial year 2025-26, by taking health insurance for yourself and your family, you can not only get health protection but can also make significant savings in income tax.
Let’s understand how you can avail tax benefits through health insurance under Section 80 D – that too in simple language!
🧾Section 80D – What is this?
Section 80D is a provision of the Income Tax Act which gives you the benefit of tax deduction on medical insurance premium. This means that whatever premium you pay, some part of it gets deducted from your taxable income.
Result? You have to pay less tax!
💸 FY 2025-26 Health Insurance Tax Deduction Limits
👉 Total maximum deduction that can be made is ₹ 1,00,000, if both you and your parents are senior citizens.
📌 Important Points to Remember:
This deduction is available only for premium paid via non-cash mode i.e. cheque, DD or online payment.
The benefit of up to ₹5,000 for preventive health checkup is available within these limits.
This deduction can be claimed for yourself, your spouse, dependent children, or parents.
Mediclaim policy, Family floater plans, and critical illness policies are all covered. The premium of all these comes under 80 D.
🧐Let’s illustrate with an example:
Mr. Sharma (35) paid ₹18,000 for his own health insurance, ₹7,000 for a family floater plan covering his wife and child, and ₹40,000 for his father’s (65) senior citizen plan.
Here’s the tax deduction breakdown:
Self & Family: ₹25,000 (eligible)
Father: ₹40,000 (under the ₹50,000 limit)
Total Deduction: ₹65,000
This lowers his taxable income and, consequently, his tax liability.
🛡️ Benefits – Health + Wealth Protection
✅ 1. Having financial backup during emergency time gives relief from worrying about money
Today, a minimum claim of Rs. 50000 to 2 lakh can be made for hospitalization expenses.
✅ 2. Tax Saving with Peace of Mind
With health insurance, you get mental peace as well as savings in income tax.
✅ 3. Separate deduction for parents
Your parents get a separate deduction of up to Rs 50,000. This is especially useful for senior citizen parents.
⚠️ Mistakes that people often make
Taking last-minute insurance just to save tax
Taking last-minute insurance just to save tax
Making cash payment – which does not give tax benefit
Not verifying the age of parents properly
Taking only minimum premium plan, without understanding the coverage
🔍Expert Insurance Tips:
✅Renew, upgrade, or get a new insurance policy before March (to take advantage of the current financial year).
✅A floater plan is more cost-effective, covering your whole family under one policy.
✅Top-up plans are also eligible for tax deductions.
✅Keep your insurance receipts and payment confirmations safe.
❓ FAQs: Health Insurance Tax Benefits 2025-26
Q1: Does this plan cover preventive checkups?
👉 Yes, preventive checkups are covered up to ₹5,000, even if paid in cash.
Q2: How can I claim deductions for my senior citizen parents?
👉 If your parents are 60 or older and you pay their premiums, you can claim a separate deduction of up to ₹50,000.
Q3: Are there deductions for group health insurance?
👉 Yes, if you’re on your employer’s group plan and paid extra voluntary premiums, those are deductible.
🔚Conclusion: Get Smart, Save on Taxes
Health insurance isn’t just about medical coverage anymore; it’s a clever way to manage your taxes. Get the right policy at the right time in FY 2025-26, and you’ll protect your health and your wallet.