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PART
- B
Deductions
from Salary Income
Certain
deductions as stated hereunder, are available in the
computation of tax chargeable under the head 'Salaries".
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Where
income from salary does not exceed Rs. 1.5 lakh,
standard deduction amounting to Rs 30,000/- or 33-1/3%
of the gross amount of salary, whichever is less,
is available as deduction, from the gross amount
of the salary or pension.
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Where
income from salary exceeds Rs. 1.5 lakh but does
not exceed Rs. 3 lakh, standard deduction amounting
to Rs 25,000 is available as deduction
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Where
income from salary exceeds Rs. 3 lakh, but does
not exceed Rs. 5 lakh, standard deduction amounting
to Rs. 20,000 is available as deduction. Where income
from salary exceeds Rs. 5 lakh, no standard deduction
is available as deduction.
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Any
tax on employment, generally described as professional
tax, levied by State Government and paid by the
employee, is also deductible from the taxable salary.
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In
addition to the above, rebate @ 20% under section
88 is available on the amount paid towards Life
Insurance premium, contribution to compulsory and
voluntary Provident fund, and contribution to other
specified saving schemes and investment in shares,
debentures or units of infrastructure sector, upto
a maximum contribution of Rs 80,000/-.
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In
addition to the above, rebate upto Rs.5,000/- under
section 88C is also available to women below the
age of 65 years.
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