The salaried employee (Taxpayee) alwaays search for Salary Income Deductions in each assessment year. In the Current Assessment year i.e. 2012-13 we suggest to know all Salaried employee about Deductions from Salary Income.
What is Salary?
As per Income Tax u/s. 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 recognized provident fund (vii) Contribution of employer to a Recognised Provident Fund in excess of the prescribed limit (viii) Leave Encashment (ix) Compensation as a result of variation in Service contract etc. (x) Contribution made by the Central Government to the account of an employee under a notified pension scheme.
What are the Deductions from Salary Income?
The following deductions from salary income are admissible as per Section 16 of the Income-tax Act.
What is Salary?
As per Income Tax u/s. 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 recognized provident fund (vii) Contribution of employer to a Recognised Provident Fund in excess of the prescribed limit (viii) Leave Encashment (ix) Compensation as a result of variation in Service contract etc. (x) Contribution made by the Central Government to the account of an employee under a notified pension scheme.
What are the Deductions from Salary Income?
The following deductions from salary income are admissible as per Section 16 of the Income-tax Act.
- Professional/Employment tax levied by the State Govt.
- Entertainment Allowance- Deduction in respect of this is available to a government employee to the extent of Rs. 5000/- or 20% of his salary or actual amount received, whichever is less.
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