Deductions under clause (i) as it stood prior to its substitution, and under clauses (iii) to (v) as they stood prior to their omission, by Finance Act, 1974 with effect from 1-4-1975 – Clarifications on certain issues retained in the compendium for reference purposes
Deduction to salaried employees who do not own any conveyance as also those who own a bicycle – I am directed to invite a reference to this Ministry’s Circular No. 36 [F. No. 275/42/70-ITJ], dated 25-3-1970 [printed under section 192] and to say that the two examples in Annexure II to the above circular have been further considered in the light of the intended import of clause (iv) of section 16, as substituted by the Finance Act, 1970. Salaried employees who do not own any conveyance as also those who own a bicycle or any other conveyance, not being a motor car, motor cycle, scooter or other moped, are entitled to standard deduction of Rs. 35 for each calendar month or part thereof comprised in the period of their employment during the year and in order to be eligible for this deduction it is not necessary for the employee to prove that he had actually incurred any expenditure on travelling for the purposes of his employment. The aforesaid deduction should, therefore, be taken into account in calculating tax deducted at source from the salary income of such employees.
Circular : No. 44 [F. No. 275/42/70-ITJ], dated 4-8-1970.