Entertainment Allowance - Professional Tax - Section 16(ii) and 16(iii) - Income Tax - Ready Reckoner - Income Tax

Sec. 16(ii) : ENTERTAINMENT ALLOWANCE Deduction allowable to Govt. employees only to the extent of the least of the following: 5,000 20% of Salary exclusive of any allowance, benefit or other perqisite Actual entertainment allowance received for the previous year Note: In case of entertainment allowance the assessee is not entitled to any exemption but he is entitled to a deduction u/s 16(ii) . Therefore the entire entertainment allowance is added in the computation of gross salary and then the Government employee is entitled to deduction from gross salary. Entertainment allowance is also called sumptuary allowance. Sec. 16(iii) : PROFESSIONAL TAX If paid by Employee Deduction is allowed from Gross Salary If paid by Employer Tax so paid should be included in gross salary as perquisite then deduction can be claimed from Gross Salary. Note: If professional tax is due but not paid, then not allowed as deduction.