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.
The employer offers a term life benefit of three times salary, to which the employee contributes $2.50 a month after-tax toward the cost. The employeeâs life insurance benefit is $114,000. The value of the amount on which the employee must pay taxes is $64,000 ($114,000 minus $50,000).