Standard deduction on salary

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 December 2018 An assessee received Salary Income of Rs.45000/- for the month of April 2018. He resigned and is now doing business and has earned Net profit of more than 500,000/- upto October 2018.

The question is - Can he take full benefit of Rs.40,000/- as standard deduction from salary or proportionately for a month??

Please reply.

Message likes : 1 times

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 December 2018 he will get the deduction only to the extent provided for in the salary slip for Month of April.

Student

Student (Querist)
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16 December 2018 Sir, I am taking about deduction under section 16(ia) which says : 16(ia) a deduction of forty thousand rupees or the amount of the salary, whichever is less;

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 December 2018 dear Student, the allowance cannot exceed the amount that was paid under the relevant head...so if you received allowance which would normally be around Rs 3333 for a month, how would you claim 40K.

Student

Student (Querist)
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17 December 2018 I understood Sir, but where does section 16 say anything about allowance. It's a standard deduction. Budget 2018 has made changes to Rule 2BB, whereas section 16(ia) doesn't speak about allowance.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 December 2018 actually, you may be correct here. the language does suggest that 40K deduction or salary whichever is lower. So I withdraw my earlier response!