Statement showing treatment of transferred balance : Difference Year Employer's contribution to fund 2016-2017 Exempted amount considering the fund as RPF 12% of 96.000 i.e. 11.520 12% of 1,14,000 i.e. 13,680 1.920 14% of 60,000+ 36,000) i.e. 13,440 14% of (72,000+ 42,000) i.e. 15,960 Total 2017-2018 2.280 4.200 Deduction from Gross Salary Sec. 16] STANDARD DEDUCTION SEC. 16(ia)] Lower of the following shall be allowed as standard deduction to all employee: a. 40,000 b. Amount of gross sulary 16 ENTERTAINMENT ALLOWANCE (SEC. 16 (11)] Entertainment allowance is initially included in taxable allowances as fully taxable. Thereafter, a deduction is allowed under this section from gross taxable salary. However, deduction w's 16(ii) shall be available to the Government employee only. Deduction for Entertainment allowance being minimum of the following: a. Actual Entertainment Allowance b. 5,000/- c. 20% of Basic Salary ILLUSTRATION Compute taxable Entertainment allowance & net salary of Sri Hanuman Prasad from the following data: Basic salary 8,000 p.m.D.A. 2,000 p.m. Taxable perquisite 35,000, Entertainment Allowance 4,000 p.m. Out of such allowance 20,000 is expended and balance amount is saved. Assuming he is: a. Government employee b. Non-Government employee