Question:
Which type of allowance qualifies for deduction under Section 16(ii) of the Income-tax Act, 1961?
Which type of allowance qualifies for deduction under Section 16(ii) of the Income-tax Act, 1961?
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Section 16(ii) = Only Entertainment Allowance deduction; only for government employees.
Updated On: Nov 30, 2025
- House Rent Allowance granted by private companies
- Entertainment Allowance granted to government employees
- Transport Allowance provided to all salaried persons
- Leave Travel Allowance given for domestic travel
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The Correct Option is B
Solution and Explanation
Step 1: Understanding Section 16(ii).
This clause allows deduction only for entertainment allowance, and that too exclusively for government employees.
Step 2: Why other options are incorrect.
HRA, Transport Allowance, or LTA are exemptions under different sections; they are not deductions under Section 16(ii).
Step 3: Conclusion.
Thus, only Entertainment Allowance for government employees qualifies.
This clause allows deduction only for entertainment allowance, and that too exclusively for government employees.
Step 2: Why other options are incorrect.
HRA, Transport Allowance, or LTA are exemptions under different sections; they are not deductions under Section 16(ii).
Step 3: Conclusion.
Thus, only Entertainment Allowance for government employees qualifies.
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