How Much Tax Can You Save on Health Insurance?
Written by Mariyam Sara
3 min read | Updated on November 11, 2025, 19:04 IST
Tax Deduction Under Health Insurance
What Are the Eligibility Criteria for Tax Deduction Under Section 80D?
Section 80D Deduction Limit
How to Avail Tax Benefits of Section 80D Under Health Insurance?
What Are the Exclusions Under Section 80D?
Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.
Health insurance is a financial tool designed to protect you against the financial risk of a health crisis. You avail this protection by paying regular premiums as mentioned in your insurance policy. Since health insurance premiums are an expenditure, according to Section 80D of the Income Tax Act, you can avail tax deductions on the premiums paid annually.
Tax Deduction Under Health Insurance
Under Section 80D of the Income Tax Act, individuals and Hindu Undivided Families (HUF) can avail tax deductions on the premiums paid on health insurance. This deduction applies to insurance taken for self, parents, spouse and dependent children. You can also claim tax deductions on preventive health check-ups and top-up health plans.
Tax deductions under Section 80D apply to all types of Health insurance plans, including the additional riders like critical illness added to the health insurance plan.
What Are the Eligibility Criteria for Tax Deduction Under Section 80D?
Under Section 80D of the Income Tax Act, the following people are eligible for tax deduction:
Individual Health Insurance
Tax-paying individuals and Hindu Undivided Families (HUF) are eligible to claim a tax deduction under Section 80D.
Family Coverage
Health insurance bought for self, spouse, dependent children and parents is eligible for tax benefits.
Section 80D Deduction Limit
Section 80 D offers a maximum tax limit of ₹1 Lakh, as per the age of the policyholder. You can avail Tax deductions under Section 80D over and above other tax benefits under Section 80C, which applies to life insurance, tuition fees for children, investments and housing, etc.
Here is a breakdown of the tax deduction limit:
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Deduction on Health insurance for self, spouse and children below 60 years of age - ₹25,000
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Deduction on Health insurance for self, spouse and children above 60 years of age ₹50,000
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Deduction for Health insurance for parents below 60 years of age - ₹25,000
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Deduction for Health insurance for parents above 60 years of age - ₹50,000
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Hindu Undivided Family (HUF) Members below 60 years of age - ₹25,000
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Hindu Undivided Family (HUF) Members above 60 years of age - ₹50,000
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Deduction on preventive health check-ups - ₹5,000.
How to Avail Tax Benefits of Section 80D Under Health Insurance?
To avail the tax benefits of Section 80D under health insurance, the following conditions should be met:
- Premium Payment Mode
Premium on health insurance should be paid in any mode other than cash. You pay premiums via UPI, debit card, credit cards and cheques, etc.
- Preventive Health Check-Up Payment Mode
Expenses incurred in preventive health check-ups can be paid in any mode, including cash, to be eligible for tax deductions.
What Are the Exclusions Under Section 80D?
There are some exclusions under Section 80D that make the expenses ineligible for deductions:
- Premium paid for Non-Dependent Member
Health insurance premiums paid for non-dependent members like children, siblings, grandparents, or other relatives are excluded from the Section 80D deductions.
- Premium Paid In Cash
Premiums should be paid in any mode other than cash to be eligible for a tax deduction. Otherwise, no tax deductions can be availed.
The government offers tax deductions as an incentive to avail of health insurance. Hence, many people use health insurance as a tax-saving investment, which explains the high registrations during tax seasons. Though health insurance is a great tax-saving tool, its main feature is protecting your financial health in times of a health-related crisis.
About Author
Mariyam Sara
Sub-Editor
holds an MBA in Finance and is a true Finance Fanatic. She writes extensively on all things finance whether it’s stock trading, personal finance, or insurance, chances are she’s covered it. When she’s not writing, she’s busy pursuing NISM certifications, experimenting with new baking recipes.
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