Home/ Questions/Q 4946
Next
In Process
CA Vishnu Ram
  • 0
Enlightened
Asked: 2021-09-27T22:27:50+05:30 In:

How entertainment allowance is taxed?

  • 0
How entertainment allowance is taxed?
Share

    1 Answer

    1. Enlightened Chartered Accountant

      Section 16(ii) of the Income Tax Act, 1961, deals with the deduction of Entertainment Allowance. For Government Employees: Entertainment Allowance is first included in salary and then deduction is allowed under Section 16(ii) up to the least of the following: ₹5,000 20% of Basic Salary (excluding alRead more

      Section 16(ii) of the Income Tax Act, 1961, deals with the deduction of Entertainment Allowance.

      For Government Employees:

      Entertainment Allowance is first included in salary and then deduction is allowed under Section 16(ii) up to the least of the following:

      1. ₹5,000

      2. 20% of Basic Salary (excluding allowances, benefits, and perquisites)

      3. Actual entertainment allowance received

      ✅ Only Central or State Government employees are eligible for this deduction.

      👨‍💻 For Non-Government (Private Sector) Employees:

      ❌ No deduction is allowed.
      👉 The entire amount received as Entertainment Allowance is fully taxable under Salary Income.

      See less
      • 0

    Leave an answer

    You must login to add an answer.

    Need An Account,