Deductions a Salaried Person can claim in Financial Year 2018–19 from their Salary Income under Income Tax

Fol­low­ing Deduc­tions a Salaried Per­son is eli­gi­ble to claim in Finan­cial Year 2018–19 (Assess­ment Year 2019–20)

All Salaried per­son is eli­gi­ble for a Stan­dard deduc­tion of Rs. 40,000/- . In addi­tion to that a salaried per­son is eli­gi­ble for fol­low­ing deduc­tions under respec­tive sec­tions of Income tax.

Deduc­tion from salary

16(ia) Stan­dard Deduc­tion Rs. 40,000 or the amount of salary, whichev­er is low­er
16 (ii) Enter­tain­ment Allowance received by the Gov­ern­ment employ­ees (Ful­ly tax­able in case of oth­er employ­ees) Least of the fol­low­ing is deductible : a) Rs 5,000 b) 1/5th of salary (exclud­ing any allowance, ben­e­fits or oth­er perquisite) c) Actu­al enter­tain­ment allowance received
16(iii) Employ­ment Tax/Professional Tax. Amount actu­al­ly paid dur­ing the year  is deductible. How­ev­er, if pro­fes­sion­al tax is paid by the employ­er on behalf of its employ­ee than it is first includ­ed in the salary of the employ­ee as a perquisite and then same amount is allowed as deduc­tion.

Fol­low­ing allowances is also deductible based on the salary com­po­nent of the salaries. If a salaried per­son is get­ting fol­low­ing allowances he/she can claim deduc­tion sub­ject to cer­tain con­di­tions. A Table has been giv­en with the respec­tive sec­tion under which a it is deductible.

Sec­tion Par­tic­u­lars Ben­e­fits
10(13A) House Rent Allowance (Sec. 10(13A& Rule 2A) Least of the fol­low­ing is exempt: a) Actu­al HRA Received b) 40% of Salary (50%, if house sit­u­at­ed in Mum­bai, Cal­cut­ta, Del­hi or Madras) c) Rent paid minus 10% of salary * Salary= Basic + DA (if part of retire­ment ben­e­fit) + Turnover based Com­mis­sion Note:   i.  Ful­ly Tax­able, if HRA is received by an employ­ee who is liv­ing in his own house or if he does not pay any rent  ii. It is manda­to­ry for employ­ee to report PAN of the land­lord to the employ­er if rent paid is more than Rs. 1,00,000 [Cir­cu­lar No. 08 /2013 dat­ed 10th Octo­ber, 2013].
10(14) Chil­dren Edu­ca­tion Allowance Up to Rs. 100 per month per child up to a max­i­mum of 2 chil­dren is exempt
10(14) Hos­tel Expen­di­ture Allowance Up to Rs. 300 per month per child up to a max­i­mum of 2 chil­dren is exempt
10(14) Trans­port Allowance grant­ed to an employ­ee to meet expen­di­ture for the pur­pose of com­mut­ing between place of res­i­dence and place of duty Rs. 3,200 per month grant­ed to an employ­ee, who is blind or deaf and dumb or ortho­pe­di­cal­ly hand­i­capped with dis­abil­i­ty of low­er extrem­i­ties
Sec. 10(14) Trans­port Allowance to an employ­ee work­ing in any trans­port busi­ness to meet his per­son­al expen­di­ture dur­ing his duty per­formed in the course of run­ning of such trans­port from one place to anoth­er place pro­vid­ed employ­ee is not in receipt of dai­ly allowance. Amount of exemp­tion shall be low­er of fol­low­ing: a) 70% of such allowance; or b) Rs. 10,000 per month.
10(14) Con­veyance Allowance grant­ed to meet the expen­di­ture on con­veyance in per­for­mance of duties of an office Exempt to the extent of expen­di­ture incurred
10(14) Any Allowance grant­ed to meet the cost of trav­el on tour or on trans­fer Exempt to the extent of expen­di­ture incurred
10(14) Dai­ly Allowance to meet the ordi­nary dai­ly charges incurred by an employ­ee on account of absence from his nor­mal place of duty Exempt to the extent of expen­di­ture incurred
10(14) Helper/Assistant Allowance Exempt to the extent of expen­di­ture incurred
10(14) Research Allowance grant­ed for encour­ag­ing the aca­d­e­m­ic research and oth­er pro­fes­sion­al pur­suits Exempt to the extent of expen­di­ture incurred
10(14) Uni­form Allowance Exempt to the extent of expen­di­ture incurred

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