7. Amendment of section 16.
In section 16 of the Income-tax Act, after clause (i) [as omitted by section 6 of the Finance Act, 2005 (18 of 2005)], the following clause shall be inserted with effect from the 1st day of April, 2019, namely:––
“(ia) a deduction of forty thousand rupees or the amount of the salary, whichever is less;”.
Notes on Clauses:
Clause 7 of the Bill seeks to amend section 16 of the Income-tax Act relating to deductions from salaries.
The existing provisions of the said section, inter alia, provide that the income chargeable under the head "Salaries" shall be computed after making certain deductions specified therein.
It is proposed to insert a new clause (ia) in the said section so as to provide for deduction of forty thousand rupees or the amount of the salary, whichever is less, for the purpose of computing the income chargeable under the said head.
This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years.
