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How Section 80D Deduction Works
Two Buckets, One Combined Deduction
Section 80D gives you a deduction in two separate buckets — one for yourself & family, and one for your parents. Each bucket has its own ceiling based on age, and the two are added together:
Bucket B (Parents): ₹25,000, or ₹50,000 if parents are seniors
Within each bucket: Preventive check-up up to ₹5,000 (aggregate, not extra)
Maximum total deduction = Bucket A + Bucket B = up to ₹1,00,000
Section 80D Deduction Limits FY 2025-26
| Scenario | Self & Family | Parents | Total Deduction |
|---|---|---|---|
| All members below 60 | ₹25,000 | ₹25,000 | ₹50,000 |
| You below 60, parents senior | ₹25,000 | ₹50,000 | ₹75,000 |
| You senior, parents senior | ₹50,000 | ₹50,000 | ₹1,00,000 |
| Preventive check-up (within above) | Up to ₹5,000 in aggregate | Not extra | |
The ₹5,000 preventive health check-up limit is included within the ₹25,000 / ₹50,000 ceilings — it is not an additional deduction. Only the preventive check-up can be paid in cash; all insurance premiums must be paid by cheque, card, UPI or net-banking.
Section 80D — Rules You Should Know
1. Who Can Be Covered
Bucket A covers yourself, your spouse and dependent children. Bucket B covers your parents (whether dependent or not). Note that premiums for parents-in-law, siblings, or independent working children are not eligible.
2. Senior Citizen Benefit
If the eldest person insured in a bucket is 60 years or older, that bucket's limit rises from ₹25,000 to ₹50,000. This is checked separately for the self bucket and the parents bucket.
3. Preventive Health Check-up
You can claim up to ₹5,000 for preventive health check-ups for the family. This ₹5,000 is an aggregate sub-limit (covering self, family and parents together) and sits within the overall ₹25,000 / ₹50,000 limits — it does not increase them.
4. Medical Expenditure for Uninsured Seniors
For a senior citizen with no health insurance, actual medical expenditure can be claimed up to ₹50,000 (within the senior limit). This is a big relief for very elderly parents who can no longer buy a mediclaim policy.
5. Mode of Payment
Insurance premiums and medical expenditure must be paid in a non-cash mode (cheque, card, UPI, net-banking) to qualify. Only the preventive health check-up amount may be paid in cash.
Step-by-Step Calculation Example
Consider Rahul, aged 40, in the 30% slab, paying premiums for his family and his senior-citizen parents:
- Own family premium (self, wife, kids): ₹28,000
- Preventive check-up for family: ₹6,000
- Parents' premium (both 65+): ₹46,000
- Parents' preventive check-up: ₹0
How the Deduction is Built:
- Self bucket: Premium ₹28,000 + preventive (capped at ₹5,000 aggregate) ₹5,000 = ₹33,000. Capped at the ₹25,000 limit (below 60) → deduction ₹25,000.
- Parents bucket: Premium ₹46,000, parents are seniors so limit is ₹50,000 → deduction ₹46,000.
Total 80D deduction: ₹25,000 + ₹46,000 = ₹71,000.
Tax saved: ₹71,000 × 30% = ₹21,300, plus 4% cess = ₹22,152 for the year.