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.
Life Insurance. Do not attempt to deduct your life insurance premiums. One of the great benefits of life insurance proceeds is that they are not considered taxable income, in most cases. This means your beneficiaries can receive a lot of money to cope with your death without worrying about the IRS.