we considered profession tax on basic salary is correct or wrong
futher my salary structure head as follows:
House Rent Allowances
City Compenstory Allowances
Are above allowance applicable for profession tax? Pls explain me as per income tax rule
I am waiting your reply.
As Professional tax is always state specific and the definitionof salary or wages may vary from state to state.
But on a general basis following is the definition :
Salary or Wages includes pay, dearness allowance and all other remunerations including allowances received by any person on a regular basis whether payable in cash or kind and also includes perquisites and profits in lieu of salary as defined in Section 17 of the Income Tax Act, 1961 (No. 43 of 1961) but does not include bonus in any form and on any account, gratuity and pension]
On the basis , all the components of the salry structure defined by you are [paid to the employees are paid on a regular basis. Hence Professional tax shall be levied on The gross salry and not on Basic only.
I think your query s very much clear.
Revert for any clarification.
Adv Naveen Bhardwaj
i have a query. I am working with a CA firm in Gujrat & they pay salary by cheques to the employees. As of now there are no deductions in the salary. there are almost 20 employees. i want to know the details of the following:
1. There is no salary structure like (basic, hra, Da, PF etc). Is it important to have a structure & deduct pf. If not doing, can there be any kind of legal actions or difficulty of any kind?
2. No professional tax is being paid. Is it compulsory to pay and if yes, how should i start?
3. does having a proper salary structure helps employees save on Income tax?
please reply. I am all confused & kind find the direction.
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