Deduction u/s 16

Section Nature of deduction Who can claim
-1 -2 -3
Against ‘salaries’
16(ia) Standard Deduction [Rs. 40,000 or the amount of salary, whichever is lower] Individual – Salaried Employee
16(ii) Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000] Government employees
16(iii) Employment tax Salaried assessees

16(ia) Standard Deduction [Rs. 40,000 or the amount of salary, whichever is lower]

Deductions from salaries.

16. The income chargeable under the head “Salaries” shall be computed after making the following deductions, namely :—

(i) [***]

Following clause (ia) shall be inserted after clause (i) of section 16 by the Finance Act, 2018, w.e.f. 1-4-2019 :

(ia) a deduction of forty thousand rupees or the amount of the salary, whichever is less;

(ii) a deduction in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees, whichever is less;

(iii) a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 276 of the Constitution, leviable by or under any law.

(iv) [***]

(v) [***]


16(ii) Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000]

16. The income chargeable under the head “Salaries” shall be computed after making the following deductions, namely :—

(i) [***]

Following clause (ia) shall be inserted after clause (i) of section 16 by the Finance Act, 2018, w.e.f. 1-4-2019 :

(ia) a deduction of forty thousand rupees or the amount of the salary, whichever is less;

(ii) a deduction in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees, whichever is less;

(iii) a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 276 of the Constitution, leviable by or under any law.

(iv) [***]

(v) [***]


Also Read – Deductions U/S 16 Of The Act From The Income From Salaries F.Y 2017-18


16(iii) Employment tax

Deductions from salaries.

16. The income chargeable under the head “Salaries” shall be computed after making the following deductions, namely :—

(i) [***]

Following clause (ia) shall be inserted after clause (i) of section 16 by the Finance Act, 2018, w.e.f. 1-4-2019 :

(ia) a deduction of forty thousand rupees or the amount of the salary, whichever is less;

(ii) a deduction in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees, whichever is less;

(iii) a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 276 of the Constitution, leviable by or under any law.

(iv) [***]

(v) [***]