Working from Home in Karnataka: Do We Need to Deduct Professional Tax?

Hi All,

I am working with a US-based MNC, and we have our office in Delhi/NCR. I have a query regarding the applicability of professional tax in Karnataka.

1. We have one employee who is working for our company, but he is not coming to the office and is working from his home, based in Bangalore (Karnataka). In this case, do we need to deduct professional tax from the employee or not? Because we do not have an office in Karnataka.

2. Also, please clarify if there is any income tax liability arising (in terms of perquisites) if the employee is not coming to the office and is working from home.

I am waiting for your valuable inputs.

Regards, Manish Aneja

Since the employee is based or residing in that state, professional tax (PT) needs to be deducted.

Regards,
Shakti

Hi Manish,
1. As the employee is on the payrolls of the company and the company is having its registered office in Delhi, it doesn't matter if he works from home or office. You don't need to deduct professional tax as PT is not applicable in Delhi/NCR.
2. If any of his household expenses eg. electricity bill, maintenance bill, etc. are being paid by the company directly or reimbursed to him, then it will be termed as perquisite and taxed accordingly. Otherwise there is no perquisite, hence no income tax liability.
Please let me know if I can help you any further.
Regards.
Manager
TopSource Global Solutions
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