It is an Allowance given by an employer to an employee. It is included under the head income from salary
A government employee receiving Entertainment Allowance is entitled to deduction under section 16(ii) from gross salary.
Sec. 16(ii) prescribes that a government employee can deduct
- 1/5th of salary, or
- Rs 5,000.
Whichever is less
Here salary includes excludes any Allowance, Benefit or other Perquisites.