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    Question

    What is the statutory limit u/s 16(ii) for deduction of

    entertainment allowance in case of government employee?
    A Rs 5000 Correct Answer Incorrect Answer
    B Rs 7500 Correct Answer Incorrect Answer
    C Rs 10,000 Correct Answer Incorrect Answer
    D 25% of employee's salary Correct Answer Incorrect Answer

    Solution

    As per section 16(ii), Government employees can claim a deduction for entertainment allowance by considering the lowest from the following: 20% of an individual’s basic salary Rs.5,000 Entertainment allowance amount received in the financial year This deduction is not available for individuals working in private firms or any statutory or local authorities.

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