Can We Claim Medical Expenses in the New Tax Regime?
Can We Claim Medical Expenses in the New Tax Regime?
Understanding Health-Related Deductions Under Section 115BAC | FY 2024–25
As healthcare costs rise, tax-saving on medical expenses become more relevant for families and senior citizens. But ever since the new tax regime was introduced, taxpayers have one common question:
“Can we claim medical expenses under the new tax regime?”
Let’s break down what’s allowed—and what’s not—when it comes to health insurance and medical deductions under the new system.
✅ Short Answer: No, Medical Expenses Cannot Be Claimed in the New Regime
If you opt for the new tax regime under Section 115BAC, you cannot claim deductions under Section 80D, which includes:
• Health insurance premiums for self and family
• Preventive health check-ups
• Premiums paid for senior citizen parents
• Medical expenses for uninsured senior citizens
This is one of the major trade-offs for choosing the new regime, which offers lower tax slab rates in exchange for foregoing most exemptions and deductions.
❌ What You Lose in the New Tax Regime (Medical Deductions)
Here are the specific health-related benefits you lose under the new tax regime:
🔹 1. Section 80D – Not Allowed
In the old tax regime, you could claim:
• ₹25,000 for health insurance (self, spouse, children)
• ₹50,000 for senior citizen parents
• Additional ₹5,000 for preventive health check-ups
• Up to ₹75,000 total deduction per year (or ₹1,00,000 if both self and parents are senior citizens)
➡️ All of the above is disallowed under the new tax regime.
🔹 2. Uninsured Medical Expenses for Senior Citizens
If your senior citizen parents don't have health insurance, you cannot claim ₹50,000 medical expense reimbursement as allowed under 80D in the old regime.
🔹 3. Section 80DD & 80DDB
• Deductions for medical treatment of a dependent with disability (80DD)
• Medical treatment of specific diseases for self or dependents (80DDB)
These are also not allowed in the new regime.
✅ Are Any Medical Benefits Allowed in the New Regime?
Only a few limited medical-related benefits are allowed:
✔️ Standard Deduction (₹50,000)
Available to all salaried and pensioned individuals. This is not specific to medical, but it is allowed under both regimes.
✔️ Employer's Reimbursement (Fully Taxable)
If your employer reimburses you for medical expenses, it will be taxable under the new regime. Earlier, ₹15,000 per year was exempt, but that exemption has been removed in the new system.
🧠 Example: Comparing Medical Deductions
Let’s say:
• You pay a ₹20,000 health insurance premium for yourself
• ₹50,000 premium for your senior citizen parents
• ₹5,000 for a check-up
➡️ Total: ₹75,000
Under the Old Regime:
✅ You can deduct full ₹75,000 under Section 80D
Under New Regime:
❌ No deduction allowed
➡️ Your taxable income increases by ₹75,000
🤔 Should You Still Buy Health Insurance in the New Regime?
Absolutely, yes.
Even if there's no tax benefit, health insurance:
• Provides financial security during medical emergencies
• Prevents you from dipping into investments
• Offers peace of mind, especially for families and aging parents
So, while you won’t get a deduction, it’s still a crucial part of your financial plan.
✅ Final Thoughts
Medical expenses are not allowed as deductions in the new tax regime.
If you wish to claim health-related deductions like 80D, you must opt for the old tax regime.
The new regime simplifies taxes, but you lose valuable benefits like medical, insurance, and wellness-related savings.
