Deductions are items which are reduced from Taxable Salary to arrive at Income from Salaries

Taxabie Salary

Less

Deductions

=Income from Salary

 

For Computing Income from Salaries.

  1. First we add all Taxable Allowances and Perquisites
  2. Then we Calculate Deductions under Section 16 to arrive at Income from Salaries

        Step 1 - Step 2 is Income from Salaries

 

There are basically 2 deductions

  1. Entertainment Allowance [ Section 16(ii)]
  2. Professional Tax [ Section 16(iii)]

Both these are reduced to arrive at Income from Salary

 

Format

Particulars Amt. received Exempt Taxable
Basic Salary xx xx xx
+Taxable Allowance xx xx xx
+Taxable Perquisites xx   xx
Gross Taxable Salary     xx
Less      
Deductions      
Entertainment Allowance     xx
Professional Tax     xx
Income from Salary     xx

  Lets study these 2 deductions one by one

  1. Income Tax
  2. Income from Salaries
Ask Download

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
Jail