Updated on 26 Dec 2025
Paying for health insurance not only protects your family from unexpected medical expenses but also helps you save on taxes. In India, the amount you spend on your health insurance premium can be claimed as a tax deduction under Section 80D of the Income Tax Act. This benefit applies whether you buy insurance for yourself, your spouse, children or even your parents, letting you manage healthcare costs while reducing your taxable income.
This guide explains how medical insurance premiums can secure your family’s health and optimise your taxes, highlighting what is universally applicable and what may vary across insurers.
What is medical insurance premium?
In India, medical insurance premiums are subject to income tax exemption under Section 80D. This is applicable to health insurance premiums paid for personal, spouse, children and dependant parents. The exemption is recorded under the Income Tax Act of India.
Tax exemption on medical insurance premiums
Health insurance, also popularly referred to as mediclaim policies in India, offers a deduction of about 35,000.00 INR to buyers.
Here is how deductions are offered to health insurance buyers in India:
- An amount of 15,000.00 INR is paid towards health insurance premiums for personal, children and spouse.
- An amount of 15,000.00 INR is paid towards health insurance premium for dependant parents (non-senior).
- An amount of 20,000.00 INR is paid for medical insurance premiums for dependant parents (senior citizens).
Section 80D of the Income Tax Act
The Income Tax Act 1961 Rule (Section 80D) for medical insurance premium deduction:
- When evaluating the total income of an insurance buyer (an individual or a Hindu undivided family), a deduction is applicable as mentioned in sub-section (2) or sub-section (3).
- If an insurance buyer is an individual, the sum mentioned in sub-section (1) shall be the total of the subsequent, i.e.:
- The entire amount is waged to effect or ensure operational, medical insurance on the individual, his family or a payment made to the health scheme proposed by the Central Government, not exceeding 15,000 INR.
- For the insurance buyer from a Hindu undivided family, the sum mentioned in the sub-section:
- (a) Must be the entire amount remunerated to effect or ensure operational, medical insurance of a Hindu undivided family member not exceeding 15,000 INR in total.
- (b) The health insurance mentioned in this section must be in accordance with a plan made on this behalf by a general insurance company established under the General Insurance Business (Nationalisation) Act, 1972 (section 9) and accepted by the Central
Or
- Any other insurance organisation approved by the IRDA (Insurance Regulatory and Development Authority) established under the IRDA Act's sub-section (1), section 3, 1999.
Deduction limits under section 80D
The maximum amount of deduction offered under Income Tax section 80D for self and family amounts to 15000 INR.
- For your parents, the deduction proposed is 15000 INR:
If the individual covered has attained 60 years of age or more, then the individual can avail of an additional deduction of about 5000 INR.
Salaried individuals can enjoy the benefit of medical allowance (under section 10) as well as the medical insurance policy under section 80D at the same time.
Key points to remember while claiming tax exemption
When claiming tax exemption in India, keep receipts, proof of investments and bills ready. Choose the right section, like 80C or 80D. File returns on time, give correct details and avoid false claims to stay safe from penalties.
Example calculation of tax deduction
Mr. Khan earns 8 lakhs, 10 thousand INR annually. He invests 20,000 INR in health insurance. This means an amount of about 15,000 INR will be deducted from his taxable income.
Mr. Khan invests in health insurance for himself and his parents. His parents are over 60 years of age and fit into the 'senior citizens' category. Now the yearly premium he should pay for the same insurance amounts to 50,000 INR. An amount of 35,000 INR will be deducted from his taxable income. This will help him avail health insurance tax benefits. Now, in case Mr. Khan fits into the tax bracket of 30 per cent already, he will enjoy a tax benefit of 10,815 INR.
Why buying health insurance is a smart tax-saving move?
An insurance policy is an umbrella that provides overall financial protection against medical expenses, and under this policy, you can choose a specific health insurance plan tailored to your needs. Paying premiums for such a plan not only safeguards you and your family from unexpected medical costs but also allows you to claim tax benefits under Section 80D of the Income Tax Act, making it a smart way to stay financially secure while optimising your yearly tax savings.
Conclusion
Investing in a critical illness insurance plan, which comes under a broader health insurance policy, protects you against high-cost medical treatments and provides additional tax advantages under Section 80D. Premiums paid for yourself, your spouse, children or parents can qualify for exemptions, helping you save on both health expenses and taxes. Choosing the right policy ensures financial safety and peace of mind. To explore suitable plans, fill out the form below and our experts will guide you in selecting the policy that fits your needs.
FAQs
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Are medical insurance premiums tax-deductible in India?
Yes, premiums paid for medical insurance are generally eligible for tax deductions under Section 80D of the Income Tax Act, helping reduce your taxable income.
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How much tax exemption can I get for medical insurance premiums?
You may claim up to ₹25,000 for yourself, spouse and children and up to ₹50,000 for parents above 60 years. Exact limits can vary based on the age and coverage of insured members.
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Can I claim tax benefits for premiums paid for my parents?
Yes, premiums paid for parents are usually eligible for additional deductions under Section 80D, whether they are dependent on you or not.
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Does the tax benefit apply to all types of health insurance plans?
The tax deduction generally applies to approved health insurance policies in India. Check your policy documents or with your insurer to confirm eligibility.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.