Professional tax paid by an employee is deductible under
ASection 16(iii)
BSection 16(ia)
CSection 16(ii)
DSection 15(iii)
Answer & Solution
Correct answer: A. Section 16(iii)
1. Professional tax is levied by a state on the exercise of a profession or employment.
2. It is one of the three deductions allowed from salary.
3. The deduction is given by section 16(iii).
4. Standard deduction and entertainment allowance occupy clauses (ia) and (ii) respectively.
_Source: ICAI Income Tax Law, Ch3 'Heads of Income', Unit 1 'Salaries', section 1.4_
Related questions
Provident fund is discussed in the salaries chapter because it isLeave encashment received by an employee is charged underGratuity received by an employee is dealt with under which head of income?In the salary computation, transport allowance appears asThe leave travel concession exemption is available toDeduction for entertainment allowance and professional tax is allowableUnder the default tax regime, house rent allowance isFor a payment to be taxed under the head Salaries, there must be