Investing in pension plans in India make you eligible for tax benefits, as specified in the Income Tax Act, 1961. Section 80CCC of this Act provides that premiums paid as part of contributions towards retirement plans and pension plans can be deducted from your total taxable income. The maximum amount of deduction permissible is Rs. 1.5 lakhs. So, your tax liability also reduces correspondingly.
As for withdrawals made from the corpus fund at maturity, the tax benefits are generally limited to the portion that’s immediately paid out to the policyholder at the vesting age. In most cases, this is one-third of the corpus fund, and it’s entirely tax-free.