I'm having dry & peeling lips (slightly above d corner of both upper and lower lips) even though I drink a lot of water, use lip balm & take vits.

Might be lip eczema. Persistent chapped lips might be lip eczema, which can be treated like skin eczema, using hydrocortisone plus Vaseline or Aquaphor to retain moisture. Sometimes, lipsticks or lip sunscreen chemicals are causing an allergic reaction on the lips. Other times, a person is a primary lip-licker (it's her habit). Once cracked, lips get irritated by some foods and juices. A doctor can sort things out.