Is It Risky If My New Job Doesn't Deduct Professional Tax from My Salary? Seeking Advice on Career Safety

Hi all, I am working in an MNC, and I received an offer from another company where they are offering me a salary of 22,000 rupees per month. This is the take-home salary, with no deductions, hence the gross salary equals the net salary.

Professional Tax Concerns

My question is: My company is not deducting professional tax from my salary. Will there be any problem for me in the future, or is it entirely the employer's risk for not paying professional tax? I believe professional tax is the only mandatory deduction from the salary, as PF deduction is not compulsory for a salary of 22,000.

Career Decision

Also, please suggest whether it is good to accept the offer. Does this company seem safe for my career?

Regards

Hi,

Depending on the state where you work, professional tax might not be applicable.

As of today, the eligibility is up to 15k only. However, the EPFO has plans to raise the ceiling limit to 25K, effective 1.4.2017.

Regarding Professional Tax, the employer will receive notice from the corporation or municipal authorities to pay for the employees, in addition to the organization.

Hi PASUPATHIESWARAN,

Thank you for the useful information on PF. Regarding Professional Tax, will only the employer be notified and/or penalized by the government, or will the employee also have to face any consequences later (e.g., when changing companies)? This information would help me make a decision on the offer I received, as mentioned in my initial question.

Please let me know if you need any further details. Thank you.

Understanding Professional Tax Deductions

With regard to Professional Tax, as rightly observed, it depends on the state where one is working. If PT is not applicable in that state, then it need not be deducted from the salary.

If it is applicable in the state, there are two possibilities: 1) It can be deducted from the salary and remitted to the tax authorities; or 2) Without deducting it from the salary, it is the employer's responsibility to remit the applicable PT to the tax authorities. Tax authorities are not concerned about whether it was deducted from the salary or not; they only concern themselves with the remittance.

Perhaps the Rs. 22,000 take-home salary offered by the company is after deducting the Professional Tax.

Regards,

Thanks for your response. What I understand now is that it's solely the employer's responsibility to deduct professional tax from the employee's salary or decide not to deduct it. When I asked the HR manager of that company about professional tax and deductions, she mentioned that they are currently not paying professional tax to the government but plan to do so in the future, as PT is applicable in the state.

If a company does not pay professional tax to the government authority even after it is eligible to pay, will the employees of the company be affected or punished in any manner by the government, or will the employer only receive a notice or penalty from tax authorities? In simple terms, are the employees safe, or are they at risk if the company fails to pay professional tax to the state government?

Your answer would be appreciated.

"Don't bother, it is the employer's responsibility to deduct PT and not the employee's."