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: Whole life policies have a living benefit, and a tax-sheltered cash account that builds up inside. Clients donât pay taxes on the gain each year, and that money can be used in retirement to supplement retirement planning. No such benefit is available with term insurance.