Understanding Professional Tax: When to Start Collecting and How to Handle Pay Cuts?

I am seeking anybody's kind attention in this regard.

Our company is registered under the P.T. Act in the month of November, though we started functioning in September. Do we have to collect tax from September onwards or from the month of November?

Pay Cut and P.T. Calculation

In the case of a pay cut (if any employee takes leave exceeding the eligible limit), how is P.T. calculated?

I am eagerly awaiting your prompt reply.

Thanks and Regards,
Divya

Professionals should be paid from the business commencement itself. When it comes to professional tax calculations, it depends on the net salary of the candidate.

Thanks & Regards,
Vani

Commencement of business is not the criterion for Profession Tax. The gross earnings of the employee for the half-year will matter for the payment of profession tax. Some states also consider the payment of bonus as earnings of the employee during the half-year.

If you can furnish the profession tax slabs applicable to your location, members will be able to respond better.

Regards,
M.V. Kannan

Thank you for the reply. This is the professional tax slab I received from Cochin Corporation, Kerala state:

Sl. No. Half Yearly Income Half Yearly Tax
1 Rs 12000 to Rs 17999 Rs 120
2 Rs 18000 to Rs 29999 Rs 180
3 Rs 30000 to Rs 44999 Rs 300
4 Rs 45000 to Rs 59999 Rs 450
5 Rs 60000 to Rs 74999 Rs 600
6 Rs 75000 to Rs 99999 Rs 750
7 Rs 100000 to Rs 124999 Rs 1000
8 Rs 124999 and above Rs 1250

Please let me know if you need any further assistance.

You have to pay the PT for all the staff from the month the salary is disbursed. You also have to pay the Professional Tax for Partners/Directors, for which you need to take separate registration from the concerned authority of the state government.

Thanks,
Biju

Hi, I have recently joined a software company and am responsible for all legal activities. We have been paying professional tax to the government since 2002, but we do not have a PT number, and our PT certificate has been misplaced somewhere. Could you please help me with how to obtain a duplicate PT certificate from the government and what the process for that is? Your early response would be appreciated.

Thanks,
Manoj
[Phone Number Removed For Privacy Reasons]

Consider the gross earnings of each employee for the period starting from September onwards. Then, remit professional tax according to the applicable slabs.

Please also verify the half-year period relevant to your location. Based on this, you need to remit professional tax at the conclusion of each half-year.

Regarding the recovery from employees, it is suggested that you can collect it in six monthly installments to ensure that employees do not feel the financial burden all at once. Additionally, note that if an employee resigns during a half-year, you should calculate their gross earnings for the period until their departure date and then deduct professional tax from their full and final settlement based on the professional tax slabs. When doing this, consider the professional tax already deducted on a monthly basis as advised by me. If my understanding is accurate, professional tax paid by employees is exempt from tax to the extent that it has been paid by the employee (verify with your finance department).

I trust that this clarifies the matter.

Regards,
M.V. KANNAN

Thank you for the valuable information. I still have a doubt. Our company received registration from ROC on October 18th, but we started working in mid-September. How should we calculate P.T.? Should it be from September or October onwards? On the employer's side, P.T. is paid in September (in Cochin, the employer also has to pay P.T.).

I joined in mid-September and received a part salary for that month. How should that month's salary be considered for tax liability?

Regards,
Divya

If the earnings for the employees do not qualify for the payment of Profession Tax, then you can disregard it. However, if an employee has earned at least Rs. 12,000 for September, they must remit Rs. 120 as Profession Tax in the first slab.

Regards,
M.V. Kannan