Professional tax or tax on employment is a tax levied by a state , just like income tax which is levied by the central government. The maximum amount of professional tax that can be levied by a state is Rs 2,500. It is usually deducted by the employer and deposited with the state government.
How is professional tax deducted from salary?
When is professional tax deducted? If you are a salaried individual then as mentioned under Article 276(2) of the Indian Constitution, your professional tax will be deducted by your employer based on your salary slab from your gross income on a monthly basis and it will then be remitted to the state.
How much P tax is deducted from salary?
What is the maximum amount of professional tax levied by a state? The maximum amount of professional tax levied by a state is Rs. 2,500 which is allowed as a deduction from your salary.
Why is professional tax deducted?
Professional tax one source of revenue for the government and is used towards bettering the services for professionals in that state . Thus, it is essential for every employer to deduct professional tax on salary, although there are a few exemptions related to this. Professional tax in India varies from state to state.
What is PT deduction in salary slip?
When you look at your payslip or salary slip, along with the deduction column, you will notice a deduction marked as “PT”. PT or Professional Tax , as it is called, is a tax paid to the state government. ... Professional tax is a state-specific tax.
Who is liable for professional tax?
Individuals earning Rs. 10,000 or more per month are liable to pay the professional tax in Karnataka under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. If you are a salaried individual having a salary more than Rs. 10,000 but less than Rs.
What is the rule for professional tax?
A maximum of Rs. 2,500 can be levied as professional tax on any person per financial year. According to Section 16 (iii) of the Income Tax Act 1961, the profession tax paid by an employee is allowed as a deduction from his/her gross salary income.
How is P tax calculated?
For example, if you are a working professional in Gujarat earning Rs. 20,000 a month, your monthly professional tax will amount to Rs. 200 and your annual professional tax will be Rs. 2400.
How is tax calculated on salary?
| Basic Salary 25000 * 12 = 3,00,000 | DA 4500 * 12 = 54,000 | EA 2250 * 12 = 27,000 | Gross Salary = 3,81,000 | Professional Tax 3500 |
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Can I claim professional tax?
Professional tax or tax on employment is a tax levied by a state, just like income tax which is levied by the central government. ... It is usually deducted by the employer and deposited with the state government. In your income tax return, professional tax is allowed as a deduction from your salary income .
Who is exempt professional tax?
The following individuals are exempted to pay Professional Tax: Parents of children with permanent disability or mental disability . Members of the forces as defined in the Army Act, 1950, the Air Force Act, 1950 and the Navy Act, 1957 including members of auxiliary forces or reservists, serving in the state.
Who is responsible to collect and pay professional tax?
Profession tax is the tax levied and collected by the state governments in India. It is a direct tax. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax.
How is basic salary calculated?
- Annual Basic = Monthly Basic X 12. Formula To Calculate Basic Salary. ...
- Gross Pay = Basic + DA + HRA + Conveyance + Medical + Other. ...
- Basic = Gross Pay – DA – HRA – Conveyance – Medical – Other. ...
- Basic = Gross Pay X Percentage.
Is HRA part of basic salary?
For most employees, House Rent Allowance (HRA) is a part of their salary structure. Although it is a part of your salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRA is exempted under Section 10 (13A) of the Income-tax Act, 1961.
What is gratuity salary?
Gratuity is a lump sum amount paid by the employer to the employee as a token of appreciation for the services they have provided towards the company.
What is PF and PT in salary?
In this article, we will look at the features within Zoho Payroll that help you with the four statutory regulations: Employees’ Provident Fund (PF) , Professional Tax (PT), Labour Welfare Fund (LWF), and Employee State Insurance (ESI).
