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.
If you paid for the premium with âafter tax dollarsâ then the long term disability benefits are generally tax-free. If your employer paid for the insurance premium or you paid for it with âpre-tax dollarsâ then the benefit is generally taxable at regular income tax rates.