CBDT amends Section 16 of Income Tax Act

ANI | Updated: Apr 05, 2018 14:10 IST

New Delhi [India], Apr. 05 (ANI): The Central Board of Direct Taxes (CBDT) on Thursday announced that the Finance Act, 2018 has amended Section 16 of the Income Tax Act, 1961.

The new provision states that a taxpayer having income chargeable under the head 'Salaries' shall be allowed a deduction of Rs. 40,000 or the amount of salary, whichever is less, for computing his taxable income.

Representations have been received seeking clarification as to whether a taxpayer, who receives pension from his former employer, shall also be eligible to claim this deduction.

The pension received by a taxpayer from his former employer is taxable under the head 'Salaries'.

Accordingly, any taxpayer who is in receipt of pension from his former employer shall be entitled to claim a deduction of Rs. 40,000 or the amount of pension, whichever is less, under Section 16 of the Act. (ANI)