Standard deduction limited to one salary income deduction where pay was received from more than one employer in the year.

An assessee who received salary from two employers in the same assessment year was held not entitled to claim two standard deductions under section 16(i) of the Income-tax Act, 1961. The retrospective Explanation inserted by the Taxation Laws (Amendment) Act, 1984, with effect from 1 April 1975, limited the deduction to one where salary was earned from more than one employer during the accounting year. On that basis, and following the earlier binding decision on the point, the allowance of two separate deductions could not be sustained. The reference was answered against the assessee.

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Issues: Whether an assessee receiving salary from two different employers in the same assessment year is entitled to claim two standard deductions under section 16(i) of the Income-tax Act, 1961.

Analysis: The assessment year in question was 1981-82. The Explanation inserted by the Taxation Laws (Amendment) Act, 1984, with retrospective effect from 1 April 1975, restricted standard deduction to one deduction where salary was received from more than one employer during the accounting year. In view of the retrospective amendment and the earlier binding decision on the point, the allowance of two separate standard deductions could not be sustained.

Conclusion: The assessee was not entitled to two standard deductions. The reference was answered in the negative and against the assessee.

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