16 April 2013
Section 16 deals with deduction from Salaries. the following deductions are allowable a) entertainment allowance granted to govt employee upto 1/5th of basic or rs. 5000/- whichever is less b) Profession tax being a tax on employment. ESIC is not covered under either of these heads and hence it will not be allowed as a deduction from salary
31 May 2013
The provisions does not include this ESIC but it can be claimed u/s 80 by adding it with LIC as it is based on insurance
The provisons u/s 16 as on to day stands as under; Deductions from salaries. 9416. The income chargeable under the head "Salaries" shall be computed after making the following deductions, namely :— (i) 95[***] 96[(ii) a deduction in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees, whichever is less;] 97[(iii) a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 27698 of the Constitution, leviable by or under any law.]
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