Budget 2025: Time to Allow Section 80D Health Insurance Benefits Under the New Tax Regime

A maximum of Rs. 1 lakh as a deduction under Section 80D of the Income Tax Act, 1961 can be availed in a single financial year. You can also claim a deduction under Section 80D on the premium that you pay for a health insurance policy or add a health rider to your life insurance plan. In India, people have no health insurance and rely on their savings or borrow money when they need to go to the clinic. The government gives tax benefits on medical insurance under section 80D to encourage people to buy health insurance under section 80D.

According to the old tax regime, One common request from the public is to increase the tax deduction limit under Section 80D for health insurance premiums paid.

For people below the age of 60 years, the tax deduction limit under Section 80D was increased from Rs. 15,000 to Rs. 25,000 in the 2015 budget and hasn’t changed since then. For senior citizens, the limit was increased from Rs. 30,000 to Rs. 50,000 in the 2018 budget.

Current Section 80D Tax Deduction Limit:

People who are below the age of 60 can claim a deduction of Rs. 25,000 for paying health insurance premiums. A health insurance policy can cover the policyholder, their spouse, and dependent children.

You can claim an extra tax deduction of up to Rs. 25,000 for health insurance premiums paid for your parents if they are below 60 years of age. If your parents are 60 years or older, this deduction increases to Rs. 50,000. From the financial year 2015-16 onwards, you are eligible to claim up to Rs. 5,000 in preventive health check-ups. That is, while calculating the Rs. 25,000 or Rs. 50,000 depending on the age of your parents, that Rs. 5,000 will be taken into account.

You cannot claim this deduction under the new income tax regime. It is only available if you choose the old tax regime and apply for a deduction under Section 80D.