Employeeâs contribution â Section 80CCD (1) Allowed to an Individual who makes deposits to his/her Pension account. Maximum deduction allowed is 10% of salary (in case of taxpayer being an employee) or 10% of gross total income (in case of tax payer being self-employed) or Rs 1, 50,000 whichever less is.
This applies to current, former and retired employees. Premiums you pay for employees' group life insurance that is not group term insurance or optional dependent life insurance are also a taxable benefit.
Most workman's compensation disability benefits are not taxable. There is, however, an important exception to this basic rule. According to the IRS, the tax exempt rule does not apply if you receive retirement plan benefits tied to your age, length of service or any prior contributions you made.