Friday, 29 August 2014

Compulsory Deductions in Salary

Deduction Out Of Gross Salary [ Sec. 16]

1.         Entertainment Allowance [ U/s 16(ii)]
Deduction u/s 16(ii) admission to govt. employee shall be an amount equal to least of following :
    1. Statutory Limit of Rs.5,000 p.a.
    2. 1/5 th of Basic Salary
    3. Actual amount of entertainment allowance received during the previous year.
2.         Tax on Employment u/s 16(iii
In case any amount of professional tax is paid by the employee or by his employer on his behalf it is fully allowed as deduction.

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