The salary persons always ask from us that tell all the deductions which we can claim from salary for A.Y. 2018-19 & A.Y.2019-20. So we are giving the list of all deductions from salary which you can claim while calculating taxable salary income or net total income after adding other sources incomes. The deductions are given along with the income tax sections. So you can get all the complete details by going to that particular section in case of any doubt.
# Standard DeductionW.e.f. A.Y. 2019-20, a standard deduction of Rs. 40,000 or the amount of salary, whichever is less, shall be allowed.
# Entertainment AllowanceThe second deduction which you claim from salary is Entertainment Allowance. Entertainment allowance received is first included in the employee’s income and then a deduction is allowed in case of government employees, for a sum equal to 1/5th of salary (excluding all allowances, benefits and other perquisites) or Rs. 5,000, whichever is less.
# Professional TaxTax on employment by whatever name called, levied by a State under Article 276 of the Constitution shall be allowed as a deduction. [Sec. 16(iii)]
# Deductions Permissible under Chapter VI-A
- Certain deductions are available from the gross taxable income, under sections 80C to 80U. Important deductions are:
- Deposit/Contribution to Life Insurance Premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, bank deposits under the notified scheme, 5 years POTD, Senior Citizen Saving Scheme, etc. [Sec. 80C]
- Contribution to LIC Pension Plan (Jeevan Suraksha) or Pension Fund of other insurance companies. [Sec. 80CCC]
- Contribution to notified Pension Scheme by employees of Central Government or any other employer or by any other individual. [Sec. 80CCD]
- Tax deductions for pension funds are a global trend now, see this example from Australia.
- Investment in listed equity shares (w.e.f 1-4-2014) A.Y.2014-15 [or listed units of equity-oriented mutual funds] under Rajiv Gandhi Equity Savings Scheme. [Sec. 80CCG]