Section 16 of Income Tax Act for AY 2023-24

Deductions from salaries. Notes on section 16 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962.

Amended and updated notes on section 16 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to deductions from salaries.

Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 16 of IT Act 1961-2023 provides for deductions from salaries.

Recently, we have discussed in detail section 15 (Salaries) of IT Act 1961. Today, we learn the provisions of section 16 of Income-tax Act 1961. The amended provision of section 16 is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 16 of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.

Section-16: Deductions from Salaries

The income chargeable under the head “Salaries” shall be computed after making the following deductions, namely :—

(ia) a deduction of fifty thousand rupees or the amount of the salary, whichever is less;

(ii) a deduction in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees, whichever is less;

(iii) a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 276 of the Constitution, leviable by or under any law.


Open Demat Account

For Investing or Trading

(Best Investing and Trading Platform in India)

Learn More