No, you can't claim the tax benefit on health premium 80D on your company's group health cover if your employer pays the full premium. The deduction only applies to premiums you pay yourself. If you pay extra to raise your group cover, add your parents to it, or buy a personal policy or top-up, you can claim that amount. The good news is that employer-paid cover isn't taxed as a perquisite either, so it adds nothing to your taxable salary.
80D Is Now Section 126
The deduction hasn't gone away. It just has a new section number now, and knowing this will save you confusion at filing time.
Section 126 of the new Income Tax Act, 2025, replaces Section 80D of the Income Tax Act, 1961. Both cover the same deduction for health insurance premiums. From the financial year 2026-27 (assessment year 2027-28) onwards, you will file your returns under Section 126. Section 80D still applies when you review or audit returns from earlier financial years.
How Group Health Insurance Is Taxed in Your Hands
Before you think about deductions, check whether the cover itself adds to your taxable salary. For most employees, it doesn't.
Your employer may pay for a group health policy under a scheme approved by the Central Government or IRDAI. In that case, the premium isn't a perquisite, isn't added to your salary, and isn't taxed. This rule also holds when the scheme covers your spouse, dependent children and parents.
Cash reimbursement is different. If your employer pays you back for medical bills you settled yourself, outside such a scheme, that amount can be taxed as a perquisite.
Can You Claim 80D on Your Company's Group Cover?
You cannot claim 80D on the part your employer pays. The deduction only applies to money you pay yourself.
HDFC ERGO explains it the same way. If your company pays the group premium for you, you get no tax benefit on it. But if you pay extra to increase your group cover, you can claim a deduction on that extra amount.
Say your company gives you ₹3 lakh of cover for free, and you pay ₹6,000 from your salary to raise it to ₹5 lakh or to add your parents. That ₹6,000 is your own spending, so it qualifies. Ask HR for a certificate showing the amount taken from your pay.
When the Deduction Actually Works for You
You can claim the full deduction once you buy and pay for cover yourself. Plenty of employees do this anyway, because group cover ends the day they leave the job.
When you buy health insurance online as a personal policy, it stays with you through job changes, career breaks and retirement. It also gives you access to these limits:
- Up to ₹25,000 a year for yourself, your spouse and children, or ₹50,000 if you or your spouse is 60 or older.
- Another ₹25,000 for your parents, or ₹50,000 if either parent is a senior citizen.
- Up to ₹5,000 for preventive health check-ups, counted within these limits.
Pay your premiums by card, UPI or net banking, because cash payments don't qualify. Health check-ups are the only cost you can pay in cash. Also, you can only claim this deduction if you've opted out of the default tax regime.
Pairing Group Cover With a Top-Up
A group policy of ₹3 to ₹5 lakh can run out after one major surgery or a long ICU stay. A top-up fills that gap, and its premium also counts towards your deductible.
A top-up health insurance plan like HDFC ERGO's my:healthMedisure Super Top-up works on an aggregate deductible. In HDFC ERGO's own example, someone has a ₹3 lakh deductible and ₹7 lakh of top-up cover, and their claims for the year add up to ₹3.25 lakh. The plan pays the ₹25,000 above the deductible. Your group policy handles costs up to the deductible, and the super top-up takes care of the rest.
The plan can also cover your parents, in-laws, spouse and kids. You don't need a medical check-up up to age 55, and you get a 5% discount on a two-year policy. Pre-existing diseases are covered only after 36 months, so it makes sense to buy one while you're still employed and healthy.
A Simple Checklist Before You File
Before you submit your declaration, sort out what you can actually claim. A few minutes with your payslip can save you a tax notice later.
- Look for any health premium taken from your salary, and ask HR for proof.
- Keep receipts for personal policies and top-ups you've paid for.
- Claim your parents' policy under the separate parents' limit.
- Compare your tax under both regimes, because the default regime doesn't allow this deduction.
- Use Section 126 from FY 2026-27 (AY 2027-28) onwards and Section 80D for earlier years' returns.
Final Thoughts
Your company's group cover is a tax-free benefit, but it won't lower your taxable income. The deduction only comes from premiums you pay yourself.
Keep your group policy, add a personal plan or a super top-up, and claim the deduction on what you pay. That way, you stay covered beyond your job and save tax as well.
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