Quick Answer: Why Is Professional Tax Deducted?

Is professional tax and TDS same?

TDS amount is like advanced Tax.

Professional tax is collected by state government.

The government rule is it deduct from your salary..

How can I reduce my professional tax?

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. In your income tax return, professional tax is allowed as a deduction from your salary income.

In which states professional tax is not applicable?

While states like Karnataka and Maharashtra have profession tax, there is no such tax applicable in Delhi and Haryana.

Is it mandatory to deduct professional tax?

It is a source of revenue for the government. … It is deducted by the employer from their employee every month and remitted to state exchequer and in some states sent to the Municipal Corporation. It is mandatory to pay professional tax. The tax payer is eligible for income tax deduction for this payment.

Who is liable for professional tax?

In case of Salaried and Wage earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.

What is Prof split period?

It is paid by dividing the annual professional tax due into 12 equal instalments, which are to be paid every month. February, as a month, is an exception where the tax is higher than the other months. There might be situations where sources of income falling under different sectors are also liable for a separate tax.

Is professional tax registration mandatory for GST registration?

This registration is mandatory for business whether they employ any people in employment or not. For GST, yes you are liable to file nil return even if there is no business. … – In respect to professional tax and filing of NIL GST returns, I may assist you in obtaining registration and payment of tax.

What happens if professional tax is not paid?

In case there is a delay in payment of professional tax, the state government of Karnataka will charge 1.25% per month for late payment. However, the maximum penalty the state will charge is 50% for late payment of the total unpaid professional tax amount.

How much does PT deduct from salary?

Which states impose professional tax and what are the tax slabs?StateIncome per MonthTax Rate/Tax Amount (per month)KarnatakaUp to Rs. 15,000NilRs. 15,001 onwardsRs. 200Kerala (Half yearly income slabs and half yearly tax payment)Up to Rs.11,999NilRs.12,000 to Rs.17,999Rs.12028 more rows

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).

Is a company liable to pay professional tax?

Profession Tax is a tax which is levied by the state on the income earned by way of profession, trade calling or employment. … In the case of salary and wage earners, the profession tax is to be deducted by the employer from salary and wages, and the employer is liable to pay it to the state government.

Is professional tax applicable on gross salary?

As per the Karnataka Professional Tax Slab Rates, all individuals with a monthly gross income less than Rs. 15,000 are exempted from any charges. However, employees with a monthly gross salary above Rs. … 1000 need to pay professional tax in Karnataka.

Is professional tax deducted every month?

Professional tax is calculated every month based on your gross salary for that month. … The professional tax will be levied on this amount of Rs. 40,000. So, each month based on the increase or decrease of your gross salary, your professional tax slab will also differ and accordingly, your employer will deduct this tax.

Can professional tax be refunded?

PT can be claimed as deduction u/s 16(iii) to the extent it is paid in a FY irrespective of the period for which it is paid. So in this case, you can claim this deduction for next year.

What is HRA salary?

The amount employees receive from the employer as a part of the paid salary is called HRA (House Rent Allowance). HRA offers tax benefits to the employees for the amount paid by them for accommodations every year. … You can avail this exemption only if you live in a rented accommodation.

Why is professional tax deducted from salary?

However, professional tax though is a kind of tax on income is levied by State Government (not all states in the country chose to levy professional tax). … It may be noted that professional tax is a deductible amount for the purpose of Income-tax Act, 1961 and can be deducted from taxable income.

How is PT salary calculated?

How Professional Tax is Calculated. A professional tax is calculated on the basis of your salary and predetermined slabs. You can have to pay anything between ₹ 200 to ₹ 2500 a month.