Section 126 (old 80D): Health Insurance Premium Deduction ₹25K / ₹50K Senior

The most consistently underused deduction in India. Sec 126, Income-tax Act 2025 (old Sec 80D) allows ₹25,000 deduction for own/spouse/children's health insurance PLUS another ₹25,000 (or ₹50,000 if parents are senior citizens) for parents' health insurance. Total potential: ₹75,000–₹1,00,000 in deductions ONLY from health insurance premiums. Available in OLD REGIME.

The full Sec 126 (old Sec 80D) matrix: Self + spouse + children (all below 60): ₹25,000. Self + spouse + children (any one is 60+): ₹50,000. Parents (both below 60): ₹25,000 additional. Parents (either parent is 60+): ₹50,000 additional. Maximum possible Sec 126 (old Sec 80D): (1) Self is 60+: ₹50K. (2) Parents both 60+: ₹50K. Total: ₹1L deduction from health insurance alone. At 30% bracket: ₹30,000 annual tax saved. Cash payment condition: Health insurance premiums: must be paid by cheque, bank transfer, net banking, UPI, credit card, NOT CASH. If paid in cash: Sec 126 (old Sec 80D) deduction denied. Only exception: preventive health check-up up to ₹5,000 within the Sec 126 (old Sec 80D) limit can be paid in cash. Group health insurance from employer: Employer pays premium for group health: no Sec 126 (old Sec 80D) to employee (employer's expense, not employee's).