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.
Disability benefits may be taxable in these situations. The rules for disability benefits are the same as those of regular Social Security benefits. For single filers in the 2008 tax year, if all sources of income plus one-half of your disability money add up to more than $25,000, you will be taxed on your benefits.