Standard Deductions from Salary Income
All about Standard Deductions from Salary Income
STANDARD DEDUCTIONS FROM SALARY INCOME
As per Section 16 of the Income Tax Act, of 1961, there are three types of deductions allowable from Salary Income which comes under the head of Standard Deductions.
As per Section 16(ia), a standard deduction of Rs.50000/- or the amount of salary whichever is less is allowable to every salaried person. Please note that pension also comes under the head salary income and thus standard deduction of Rs.50000/- or the amount of pension whichever is less is also available to a pensioner.
As per Section 16(ii), With respect to salary received from the Government, Entertainment allowance is deducted provided that the same is granted to the employee by the employer. The limit of deduction under this head is 1/5th of Salary (excluding any allowance, perquisite, etc.) or Rs.5000 whichever is less.
As per Section 16(iii), any Employment tax paid by the employee is wholly deductible from Salary Income whether levied by the Central or State Government.
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