As per Section 16 of the Income Tax Act,1961, there are three types of deductions allowable from Salary Income which comes under the head of Standard Deductions.
1.As per Section 16(ia), 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 amount of pension which ever is less is also available to a pensioner.
2. As per Section 16(ii), In respect of salary received from Government, Entertainment allowance is deducted provided that the same is granted to the employee by the employer. The limit if deduction under this head is 1/5th of Salary (excluding any allowance, perquisite etc.) or Rs.5000 whichever is less.
3. As per Section 16(iii), any Employment related tax paid by the employee is wholly deductible from Salary Income whether levied by Central or State Government.