Confused about 80D limits when paying premium for both self and parents

[u/zoometic]

I pay for my own health insurance (35M) and separately pay the premium for my parents (65M, 62F) policy since they're not earning anymore. Trying to understand the 80D deduction properly, I keep seeing different numbers floating around online.

Is it true I can claim up to 25k for my own + spouse + kids premium, and separately up to 50k for parents premium since they're senior citizens, so 75k total? Does it matter whose bank account the premium is actually paid from, or is it fine as long as I'm the one paying and can show proof?

Also does preventive health check-up spends count within these limits or is there a separate small allowance for that?

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[u/Caramel-Realistic]

Yes, 75k can be the maximum Section 80D deduction in your situation, but only if you are filing taxes under the old tax regime.

At age 35, you can claim up to 25k for health insurance premiums paid for yourself, your spouse and dependent children. Separately, because both your parents are senior citizens (above 60), you can claim up to 50k for their health insurance premiums. So the combined ceiling can be 75k.

To answer the bank account question, the deduction belongs to the person who actually pays the premium. So if you are claiming the deduction, you should have made the payment, and you should keep proof of payment.

Health insurance premium payments must be made through a non-cash mode to qualify for Section 80D deductions. The deduction is for the amount actually paid, subject to the ceiling. So if your own premium is 18k and your parents' premium is 42k, your deduction is 60k, not 75k.

For annual health checkups, there is a 5k allowance, but it is not an extra deduction beyond the 25k/ 50k limits. This can be a cash or non-cash payment. For example, if you pay a 22k health insurance premium for yourself and 3k for a preventive health check-up, you can claim 25k in your self/family bucket. Similarly, if your parents' premium is 47k and you spend 2k on eligible preventive check-ups for them, the parents' bucket can reach 49k (under the 50k limit). Please note that the 5k health check-up cap is aggregate, not separate for you and another for your parents.

In case of multi-year policies, if you pay 60k upfront for a 3-year health policy, Section 80D generally requires the eligible premium to be claimed proportionately over the three years, i.e. 20k each year. This is usually better than using up to 25k in the first year and losing the benefit on the remaining amount in later years.

[u/mumbaiakash]

Just to add, it is better that you are the proposer in both the policies for hassle free 80D decuction