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.
When you die, your life insurance death benefit is added to the value of your estate. If it is over the estate tax limit, the money is taxable. Your life insurance money, if tied up in a permanent policy, can be taxable during your life. Some permanent policies build up cash value that you can pull from while you are living. At the beginning, this money comes from your premium payments. However, the insurance company invests this money and it grows over time.