Meaning of tax terms
Meaning of “In the performance of duties”
The meaning of in the performance of duties under section 16 of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here is an excerpt of court’s order in which the Hon’ble High Court tried to explain the meaning of in the performance of duties.
Meaning of In the performance of duties defined by court
The phrase “in the performance of duties” used in section 16 of the Income Tax Act came up before hon’ble Kerala High Court in A.K. Venkteswaran Vs. CIT [1973] 92 ITR 233 (KER.) and it explained
Meaning: The term ‘in the performance’ is much narrower in its scope than the term ‘for the purpose of the performance’. Many items of expenditure may be incurred by an assessee to enable him to perform his duties properly. These are not expenses incurred in the performance of the duties as the latter class is limited to those expenses incurred during the process of performance of the duties. The duties may vary depending on the office one holds.
The duty, say, in regard to some officers, involve attendance at meetings and conferences and if in regard to such persons, expenses are met while attending the meeting or conference and it is wholly, necessarily and exclusively in the performance of their duties, they may be entitled to claim deduction.
Similarly, the deductions may be one involving travel such as that of travelling salesmen and in such cases expenses incurred in travelling in the course of business are incurred in the performance of duties. This will not be true in the case of a person who incurs expenses for travelling for the purpose of performing his duties, but whose duties do not by themselves involve travelling.
Section 16 of Income Tax Act
Deductions from salaries.
16.The income chargeable under the head “Salaries” shall be computed after making the following deductions, namely :— (i) [***]
(ia) a deduction of fifty thousand rupees or the amount of the salary, whichever is less;
(ii) a deduction in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees, whichever is less;
(iii) a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 276 of the Constitution, leviable by or under any law.
(iv) [***]
(v) [***]
In this article, you can get guidance from the high court on the meaning of in the performance of duties under section 16 of the Income Tax Act.
Updated up to Finance Act 2021.
