These are two advantages of saving into Pension:
1- Tax Relief – The taxman will give following tax relief (under Sections 80C, 80CCC and 80CCD) to your pension contribution. The limit for maximum deduction (As per Section 80CCE) available under Sections 80C, 80CCC, and 80CCD (combined together) is Rs. 1,00,000/- (Rs. one lac only).
2- Tax-free Lump Sum – When you retire, you can normally choose to take less income and have up to 33.3% of your pension pot as tax-free cash and for the remaining 66.6%, you have to buy an Annuity Plan from LIC or Other Life Insurers.