Is health insurance premium deductible in the new tax regime?
No — Section 80D (health insurance premium deduction) is not available under the new tax regime. But whether you get a tax benefit should not determine whether you buy health insurance. This lesson explains what 80D covers under the old regime, the maximum ₹75,000 deduction with senior citizen parents, and why under-insuring to save premium is the wrong trade-off.
All figures and facts in this article are sourced directly from primary government and regulatory publications — including the Reserve Bank of India, SEBI, EPFO, the Income Tax Department, PFRDA, and IRDAI — and verified before publication. No claim is published from a single source without corroboration.
Part of the Zero to One series — Chapter 2: Old vs new tax regime. Lesson 3 follows on from Lesson 2 (80C in the new regime). For informational purposes only — not tax advice.
No. Health insurance premium is not deductible under the new tax regime.
The deduction — Section 80D of the Income Tax Act — is available only under the old tax regime. If you have chosen the new regime, you cannot reduce your taxable income by the amount you pay in health insurance premiums.
But this lesson is not really about whether health insurance is tax-deductible. It is about a mistake many people make: deciding whether to buy health insurance, or how much to buy, based on whether it gives a tax benefit. That is the wrong framework. This lesson explains why — and what 80D actually gives you if you are on the old regime.
What Section 80D covers (old regime only)
Under Section 80D, you can deduct health insurance premiums paid for:
| Coverage | Maximum deduction |
| Self, spouse, and dependent children (below 60) | ₹25,000 per year |
| Self, spouse, and dependent children (any member 60+) | ₹50,000 per year |
| Parents (below 60) | ₹25,000 per year |
| Parents (60+, senior citizen) | ₹50,000 per year |
Maximum combined deduction for a 35-year-old with senior citizen parents:
₹25,000 (own family) + ₹50,000 (senior citizen parents) = ₹75,000 per year
Within the above limits, you can also deduct up to ₹5,000 for preventive health check-ups (included within the overall limit, not in addition to it).
Tax saving at 20% slab:
- Own family premium of ₹18,000: saves ₹3,600 in tax
- Senior citizen parents' premium of ₹35,000: saves ₹7,000
- Total tax saving: ₹10,600
This is real money — but it is secondary to the primary purpose of health insurance, which is protecting you from financial ruin during a medical emergency.
The wrong question: "should I buy health insurance because it saves tax?"
Health insurance exists to protect you from catastrophic medical costs. A single hospitalisation in a private hospital in a metro city costs ₹3–8 lakh for a moderate procedure. Without insurance, you pay out of pocket, liquidate investments, or take a personal loan at 20%+ interest.
Whether or not you get an 80D deduction does not change this risk.
Under the old regime: Buy adequate health insurance. Get the 80D benefit as a side effect.
Under the new regime: Buy adequate health insurance. No 80D benefit — but the insurance need is identical.
Choosing the old tax regime specifically to claim 80D is rarely rational. The 80D deduction saves ₹3,600–₹15,000 per year. The decision to be in the old vs new regime turns on thousands of rupees of tax difference driven by far larger deductions (80C, home loan interest, HRA). Do not let ₹3,600 in 80D savings drive a decision that might cost you ₹30,000 in foregone regime benefit.
What does qualify for deduction under new regime (health-related)
Nothing health-insurance-specific.
The only way health insurance touches the new regime is indirectly, through employer contributions:
- If your employer provides group health insurance as a benefit (a standard employer cost), that benefit is not a taxable perquisite in your hands and requires no deduction
- If your employer contributes to a health cover as part of a group plan, there is no personal tax action required
The health insurance premium you pay personally for your individual policy gives zero deduction under the new regime.
A note on the cost of health insurance vs the tax saving
Many people under-insure because they look at health insurance as a tax tool rather than a risk tool.
Scenario: Ravi is 35 and buys a ₹5 lakh health insurance policy for ₹8,000/year because "₹8,000 qualifies for 80D." He does not buy ₹15 lakh of cover because it costs ₹18,000 and he doesn't want to pay "too much." In the 30% old-regime bracket, the ₹18,000 premium nets him a ₹5,400 tax saving — the net cost is ₹12,600. His worry about ₹18,000 gross is misplaced; the after-tax cost is ₹12,600. And ₹15 lakh of cover in a metro hospital is far more useful than ₹5 lakh.
Buy the coverage you actually need. Then calculate the tax benefit as a side-effect.
How to claim 80D in your ITR (old regime)
80D deductions are self-declared in your ITR. You do not need to submit premium receipts to the income tax department — you declare the amounts and keep receipts in case of scrutiny.
In your ITR:
- Go to Schedule VIA (deductions under Chapter VI-A)
- Enter your health insurance premium amounts under "80D — Medical Insurance Premiums"
- Separate fields for self/family and parents, with age classification for senior citizens
Your employer does not automatically deduct the 80D benefit from TDS unless you tell them via Form 12BB. Submit Form 12BB with your health insurance premium receipt to your employer in April each year if you want TDS adjusted during the year. If you do not submit, you claim 80D at ITR filing time and either get a refund or pay less advance tax.
The next lesson covers the additional ₹50,000 NPS deduction under Section 80CCD(1B) — the one deduction that specifically rewards salaried employees who invest in NPS above and beyond their 80C limit.
Sources: Section 80D, Income Tax Department · 80D deduction guide, ClearTax
Last verified: June 2026. Tax rules are as per Finance Act 2025 for FY 2025-26. 80D is not available under the new tax regime.
Content on Ek Crore is for educational purposes only. Nothing here is financial advice. Always consult a SEBI-registered advisor, CA, or qualified professional before making investment or tax decisions.