Section 126: Health Insurance Deduction Guide#
What is Section 126?#
Section 126 allows deduction for health insurance premiums and medical expenses. It's available for individuals and HUFs.
Deduction Limits#
For Individuals:#
| Category | Deduction Limit |
|---|---|
| Self & family | Rs 25,000 |
| Parents (below 60) | Rs 25,000 |
| Parents (above 60) | Rs 50,000 |
| Maximum | Rs 1,00,000 |
For Senior Citizens:#
- Premium paid for self: Rs 50,000
- Maximum combined: Rs 1,00,000
Eligible Payments#
- Health insurance premium
- Preventive health check-up (up to Rs 5,000)
- Medical expenses for senior citizen (if no insurance)
- Critical illness riders (within the same overall limit as the base premium)
Not Eligible#
- Health cover already provided by your employer
- Premium paid in cash above Rs 20,000 (except preventive check-up)
- Policies for property/units not located in India
Important Points#
- Payment must be by cheque/digital mode
- Cash payment allowed for preventive check-up only
- Premium for parents is separate from self
- Deduction available under old tax regime only
Example#
- Self & family premium: Rs 20,000
- Parents' premium: Rs 30,000
- Total deduction: Rs 20,000 + Rs 30,000 = Rs 50,000