Navigating Employee Resignation: Do We Need to Refund Professional Tax?

Hello to all,

I am new to this field. I am working for a company and designing the HR department for the company. There is an employee who has resigned and now claims that they will require a refund of the Professional Tax. I wish to know if we have to reimburse the amount of Professional Tax to them and what else we have to reimburse to them.

Regards,
Geetanjali Shetty.

Hi, Geetanjali, Professional Tax is a tax levied by the State Government on income earned through a profession, trade, calling, or employment. Therefore, any income earned by an employee falls under professional tax and must be deposited with the state department. Professional Tax slabs vary from state to state and can be easily accessed online.

Now, the question is whether the individual is a resigned employee still under notice, or if they have already left and are claiming their Full and Final settlement. Whatever the case may be, Professional Tax must be deducted according to the state slab.

Regards, Niraj Sharma

As rightly mentioned by Niraj, professional tax is levied as per the salary slab or rate structure, which varies from state to state. The professional tax can be set off against the taxable salary at the time of final TDS calculation.

Either a resigned employee or an employee who is currently on the company's payroll does not have the right to claim a refund of any amounts (ESI/PF/Professional tax/Labour welfare fund) that were deposited under statutory obligations as these are non-refundable. In the case of PF, employees must follow the proper procedure to claim their funds directly from the authorities. Any immediate requests for refunds should be denied, and if the situation escalates and causes disturbance, attempts should be made to resolve it amicably, or a complaint can be lodged with the local police.

Dear Miss Geetanjali Shetty,

You have stated that you are new to the job. Nevertheless, verify from your records whether PT deducted from the concerned employee has been remitted to the government concerned. By this time, you should have done this. What do you mean by reimbursement? Is any reimbursement amount due to the employee as per the terms of appointment? Please revert with your observations.