The salaried persons are allowed a standard deduction of

Solution

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. The limit of standard deduction under Section 16 was changed in the Interim Budget 2019. From the existing limit of INR 40,000, the deduction amount was raised to INR 50,000 to provide higher tax relief to salaried individuals. The other deductions allowed from Salary income under Section 16 include: · Deduction for entertainment allowance under Income Tax Section 16(ii) · Deduction for professional tax paid on salary income under Section 16 (iii) The other sections refer to: · Section 87 A = rebate on tax in case the total income is less than 5 lakh in a financial year · Section 80 E – deductions for interest on education loan · Section 10 (13 A) – relates to deduction for Houring rent allowance (HRA) · Section 80TTA = deduction on interest income from savings accounts with bank/post office up to max of Rs.10,000