Deductions are allowed to tax payer for reducing their tax liability. With the help of deductions assesse can avail benefit of low tax payment in a legal manner.
For the betterment of taxpayer government has introduced multiple sections in act and amends or inserts new sections on timely manner. In spite of chapter VI A government allowed some standard deduction in each head of income.
As per section 16(i) government allowed 50,000 as direct deduction without any condition and limit to all class of employee whether he is employed under government or non-government entity.
But an employee who is work under more than one employer deduction amount is restricted to Rs 50,000 for all multiple salary income.
Deduction for entertainment allowance is applicable only for government employees to the extent of the lower from the followings.
Note: – Meaning of salary- only basic pay (all allowance and perquisites to be excluded)
Deduction for professional tax is applicable for all class of employee whether government or non government.
Directly deduct from gross salary
Firstly treat it as perquisites and added back in the salary and there after reduce it from gross salary.