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1 Skin diseases like eczema and scabies can also cause red itchy palms. 2  Bumps and exfoliation of palmer skin is observed in these conditions. 3  Bacterial and fungal infection of palms can be a reason for itchy palms. 4  Dry skin of palms can be a reason for itchy palms.
Skin peeling on the palms is due to the damaged skin as a result of burn or sunburn and even skin infections. In the case of immune disorder or diseases, the skin will be marked by itchiness, dryness and other features like peeling off.