Profession Tax Levy On Basic Or Gross Salary

Hi Sandeep ESIC Criteria is 15000. If any employees salary is 15000 or less then 15000 they have to pay ESIC. and its heard that from April month criteria will become 25000. ESIC is deductible on Gross Salary.

Dear All,
Salary break up is necessary to an Organization and Employees to avail tax benefit under Income Tax Act,
The CTC is divided into the following components;
1. Gross Salary
a) Basic Salary
b) DA
c) HRA
d) Conveyance
e) Special Allowance
2. Contribution
a) PF Contribution
b) ESIC Contribution
3. Reimbursements ( Examples)
a) Medical Allowance
b) Leave Travel Allowance(LTA)
c) Petrol
d) Vehicle Maintenance
e) Driver Salary
The CTC break up will change from company to company and based on income tax saving to employees.
Salary break up is very important to any Organization and to Employees, since some statutory claims are calculated on some salary components but not on total CTC amount like; PF is on Basic Salary & Dearness Allowances, ESIC is on Gross Salary and PT is based on Gross Salary.
As per income tax some allowances are exempted from tax like; HRA, Conveyance, Medical Allowance, LTA and Some Special Allowances( Uniform Allowance, Driver Salary, Helper Allowance etc..).

Hi all,
Professional tax should be deducted on Gross salary.
But in our case, LTA is being added to Gross salary and Night Shift is reducing from Gross salry for the purpose of PT Calculation. Can u plz let me know whether that is correct.
If only regular pay to be added to Gross salary, then Why LTA is considered for PT?
Please clarify.

Hi Dilip,
The Professional Tax is a source of revenue for the state governments which helps in implementing schemes for the welfare and development of the region. Professional Tax is deducted by the employers from the salary of the salaried employees and is deposited with the state government. Other individuals, pay it directly to the government or through the local bodies appointed to do so.
The respective state governments in India levy the professional tax on income from profession or employment. The professionals earning an income from salary or other practices such as a lawyer, teacher, doctor, chartered accountant, etc. are required to pay 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 same is to be deposited to the state government. In case of other class of individuals, this tax is liable to be paid by the employee himself. The tax calculation and amount collected may vary from one state to another, but it has a maximum limit of INR 2500/- per year.
You can refer the following link for more information on Professional Tax applicable states, not applicable states, exemption. Profession Tax Slabs India - greytHR Admin Guide - Greytip Documentation

Dear All
Please confirm in MP PT is deducted on Gross Rate of Salary or Gross Earned Salary.