Section 16 → Section 21
Deductions from Salaries
Quick Answer
Section 16 of the Income Tax Act, 1961 (Deductions from Salaries) corresponds to Section 21 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 16
Provision Summary
Provides for Standard Deduction, Entertainment Allowance, and Professional Tax deductions.
Sec 21
Provision Summary
Standard deduction explicitly integrated as a baseline exemption for all individual tax regimes by default.
Key Changes & Highlights
- Standard Deduction limit algorithms updated to auto-adjust based on inflation indices for future years.
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Frequently Asked Questions
What does Section 16 of the Income Tax Act 1961 deal with?
Section 16 (Deductions from Salaries) Provides for Standard Deduction, Entertainment Allowance, and Professional Tax deductions.
What is the new section number for Section 16 under the Direct Tax Code 2025?
Section 16 of the ITA 1961 maps to Section 21 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 16 under the new tax code?
Section 16 is marked as "Retained" with status "Modified". Impact: High - Affects the take-home pay calculation for every salaried employee.
What are the key changes to Section 16 under DTC 2025?
Standard Deduction limit algorithms updated to auto-adjust based on inflation indices for future years.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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