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.
Benefits: Sometimes taxable. Whether disability insurance benefits are taxable depends on how you paid your premiums, says Sherman. If you pay your premiums with pretax income, then the benefits are considered taxable income, he says. If you pay the premiums with after-tax dollars, then the benefits are tax-free..