Section 16 of Income Tax Act, 1961 provides deduction from income chargeable to tax under the head ‘salaries’. It provides deductions for the standard deduction, entertainment allowance, and professional tax. Through this deduction, a salaried taxpayer can lower his/ her taxable salary income chargeable to tax.
What is deduction under section 16 IVA IVB IVC?
What is Section 16? Under this new provision of the Income Tax Act, a taxpayer who has income that is chargeable under the head ‘Salaries’ should allow deduction of Rs. 40, 000 or the salary amount, whichever is less, for the computation of the taxable income.
What is deduction under section 16 of Income Tax Act?
Standard deduction under Section 16(ia) is a flat deduction that is allowed from the salary income. The concept of standard deduction was introduced in the Union Budget of 2018 wherein it replaced the tax-deductible transport allowance and medical allowance of INR 19,200 and INR 15,000 respectively.
What is Section 16 3 of income tax?
Under Section 16(iii), a deduction from salary can be claimed by the taxpayer on account of professional tax paid. The deduction for professional tax will be allowed in the year in which the tax is actually paid by the employee. Professional tax due but not paid cannot be claimed as a deduction from salary.
What is deduction under section 16 Quora?
Section 16, inter-alia, provides for certain deduction in computing income chargeable under the head “Salaries”. it is proposed to allow a standard deduction upto Rs 40,000/- or the amount of salary received, whichever is less.
What is standard deduction u/s 16 IA for AY 2020 21?
Deduction u/s 16(ia) states that a tax payer having income chargeable under the head ‘Salaries’ shall be allowed a deduction of ₹ 40,000 or the amount of salary, whichever is less, for computing his total income. Now all employees will get a standard deduction of ₹ 40,000 p.a.
What is Section 10 of IT Act?
The objective of section 10 of the Income Tax Act is to reduce the burden of the different structure of the tax such as rent allowance, allowance for children education, travel allowance, gratuity and so on.
What is 80CCG exemption?
Section 80CCG of the Income Tax Act offers incentives through means of tax deduction to taxpayers who invest in the equity market of the country. This section was recently added to encourage individuals to invest in equities, enticing first time investors with tax deductions on their first investment.
How is tax calculated on salary?
Income tax calculation for the Salaried
Income from salary is the sum of Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some components of your salary are exempt from tax, such as telephone bills reimbursement, leave travel allowance.
What is standard deduction salary?
Standard deduction means a flat deduction to individuals earning salary or pension income. It was introduced back in Budget 2018 in lieu of exemption of transport allowance and reimbursement of miscellaneous medical expenses. For the FY 2019-20 & FY 2020-21 the limit of the standard deduction is Rs 50,000.
What is the section 17 1?
Section 17(1) of the Income tax Act gives an inclusive and not exhaustive definition of “Salaries” including therein (i) Wages (ii) Annuity or pension (iii) Gratuity (iv) Fees, Commission, perquisites or profits in lieu of salary (v) Advance of Salary (vi) Amount transferred from unrecognized provident fund to …
What is Section 87A of Income Tax?
Section 87A provides tax rebate to the individual taxpayers if their total income is less than Rs 5 Lakhs after claiming deductions. Hence , firstly taxable income after deductions is to be determined to check the eligibility of the rebate.
Which of the following allowance is fully exempted?
Certain categories of taxes are fully exempted such as allowances given to judges at the Supreme Court and the High Courts. Allowances such as house rent allowance are partially exempted as per Section 10(13A). Other allowances such as city compensatory allowance are fully taxable.
What is less deduction U S VI A?
The Chapter VI A of Income Tax Act contains the following sections: 80C: Deduction in respect of life insurance premium, deferred annuity, contributions to provident fund (PF), subscription to certain equity shares or debentures, etc. The deduction limit is Rs 1.5 lakh together with section 80CCC and section 80CCD(1).
What is exemption under section 10 of Income Tax Act?
Section 10 of the Income Tax Act covers many allowances such as Leave Travel Allowance, Uniform Allowance, Travelling Allowance, House Rent Allowance and some more. However, some special allowances that are exempt fall under Section 10 (14).
What is standard deduction in India Quora?
Standard Deduction refers to a flat deduction provided to every salaried person. The current budget has proposed a standard deduction of Rs. 40,000/-. The advantage of a standard deduction is that one does not need to submit any documents in order to claim it.