Understanding Professional Tax in Gujarat: Is It Calculated on Gross or Net Income?

Professional Tax

Hello all, please let me know a professional tax calculation example according to Gujarat state. I want to know whether PT is calculated on gross income or net income, i.e., after deductions like leave without pay, etc.

PT is calculated on the gross salary. I am not aware of the slabs for Gujarat, but it is calculated based on the gross salary.

To Jeevarathnam,

Thanks for informing me, but can anyone help to find out the professional tax for the example below according to the Gujarat slab, which is also provided below.

Total Earnings
- Basic Salary: ₹5500.00
- Conveyance Allowance: ₹800.00
- HRA: ₹2200.00
- Personal Allowance: ₹500.00

Deductions:
- Professional Tax?
- LWP: ₹519
- Gross Earning: ₹9000.00
- Net Payable: ₹8481

Gujarat P.T Slab
Slab (Rs.) | Rate of Tax (per month)
1. Less than 3000 | Zero
2. 3000 to 5999 | Rs. 20
3. 6000 to 8999 | Rs. 80
4. 9000 to 11999 | Rs. 150
5. 12000 or more | Rs. 200

Please inform me of the professional tax calculation in this case.

I am a bit confused about LWP of 519. Can you explain what that is? Whatever the case, your gross and net falls under the slab of Rs. 9000/- to Rs. 11,999/-. So, PT is Rs. 150/-. If you need any clarifications, you can contact me.

Cheers,
Jeevarathnam

Dear Jeevarathnam, thanks for your solution. I have a question: if an employee joins on the 15th of any month, which is the middle of the month, is the professional tax calculated on the gross salary or in any other way?

LWP stands for Leave Without Pay, and in my company, it is calculated based on 26 days, excluding Sundays and holidays. Please inform me if it is legal to calculate the salary based on 26 days instead of 30 days.

Regards, Sneha Nair

Irrespective of the days worked, PT is calculated based on the total earnings of that particular month. He/She may work either 10 days or the full month, but you should just see how much he/she earned.

Hope this is clear.

Cheers :)

Hi Sneha, PT is calculated on Gross. I am not aware of the slabs for Gujarat, but it is calculated on gross salary. Can you give me an example of CTC designing?

Revised Tax Slab in Gujarat for Financial Year 2013-14

Please find the revised tax slab in Gujarat for the financial year 2013-14:

- Slab (Rs.) Rate of Tax (per month)
1. Less than 3000 - Zero
2. 3000 to 5999 - Rs. Zero
3. 6000 to 8999 - Rs. 80
4. 9000 to 11999 - Rs. 150
5. 12000 or more - Rs. 200

Source: https://www.citehr.com/401416-profes...#ixzz2ptAv0aYi

Dear professionals, I still could not get a proper answer to the above query raised by Ms. Sneha. If a person has a monthly salary of Rs. 9,000/- (There are no deductions on account of PF, ESI, etc.), which means a gross annual income of Rs. 1,08,000/-. As per the slab rate given by Harshil Patel, the PT to be deducted is Rs. 150/- over the next 12 months.

In the month of June, his salary has been deducted on account of leave without pay for 4 days. So his earnings are Rs. 7,800/- only for that month. Now, should the PT deduction be Rs. 150/- for the month of June or Rs. 80/-? I am facing this problem as my statutory auditors say that it should be Rs. 150/-, while my point of view is that it should be Rs. 80/-. A prompt reply is appreciated.

Regards,
Mridul

Dear Ms. Mridul,

You are right. Normally, PT is calculated based on the actual wages drawn for that particular month.