Hello All,
I would like to seek your guidance and assistance regarding the below issue/concern which we are facing in our organization:
I work for a company in Mumbai, and for the state of Maharashtra, there is a Professional Tax Applicable which is deducted from our earnings every month. It's Rs. 200 for 11 months and Rs. 300 for February, totaling to an annual figure of Rs. 2500.
But in my company, the PT is deducted from the NET SALARY (take-home salary).
For example:
Gross Salary = 40000
- (Deductions) = 3000 (this deduction includes PF, gratuity, and other small components)
NET SALARY = 37000 (this is the defined take-home salary in our Offer Letter and Appointment Letter)
Now, my company deducts Rs. 200 from Rs. 37000, which is my Net Salary. So when the Salary is actually credited to my account at the end of every month, we have a difference of Rs. 200.
I would like to know if this is the correct way to deduct Professional Tax. If it's yes, then I am wrong. But if it's not the correct way, I need your help to let me know the Article and Clause in the Law which gives a clear indication regarding the Deductions of Professional Tax.
Your help regarding this query will be highly appreciated.
From India, Thane
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I would like to seek your guidance and assistance regarding the below issue/concern which we are facing in our organization:
I work for a company in Mumbai, and for the state of Maharashtra, there is a Professional Tax Applicable which is deducted from our earnings every month. It's Rs. 200 for 11 months and Rs. 300 for February, totaling to an annual figure of Rs. 2500.
But in my company, the PT is deducted from the NET SALARY (take-home salary).
For example:
Gross Salary = 40000
- (Deductions) = 3000 (this deduction includes PF, gratuity, and other small components)
NET SALARY = 37000 (this is the defined take-home salary in our Offer Letter and Appointment Letter)
Now, my company deducts Rs. 200 from Rs. 37000, which is my Net Salary. So when the Salary is actually credited to my account at the end of every month, we have a difference of Rs. 200.
I would like to know if this is the correct way to deduct Professional Tax. If it's yes, then I am wrong. But if it's not the correct way, I need your help to let me know the Article and Clause in the Law which gives a clear indication regarding the Deductions of Professional Tax.
Your help regarding this query will be highly appreciated.
From India, Thane
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Hi, your tax is being calculated on your gross salary, and the amount remaining after PF & ESIC deduction is your net or take-home salary. If there is any tax liability, it will be deducted from this net salary only.
Regards,
Neelam
From India, Jaipur
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2Regards,
Neelam
From India, Jaipur
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PT should be deducted on Gross salary (total payable)... Regards Nilesh Dhameliya
From India, Surat
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From India, Surat
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Hello,
What is your confusion?
Salary cannot be called net salary until all deductions are made from it. So, whatever salary you are receiving in hand is called the net salary. It cannot be called the net salary until the deduction of PT is made.
From India, Mumbai
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What is your confusion?
Salary cannot be called net salary until all deductions are made from it. So, whatever salary you are receiving in hand is called the net salary. It cannot be called the net salary until the deduction of PT is made.
From India, Mumbai
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Hi,
Tax amount is never mentioned in the offer or appointment letter. The company provides the calculation of "take home" salary, and then deducts the tax on your behalf. If you are expecting that the offer letter should mention the taxes, then read the letter again. There must be a sentence stating that the tax arising from this salary will be deducted as per the tax rules of India.
Going beyond the professional taxes, the income tax (as it will be applicable to you, if your salary is 40K/month) can also be deducted from this salary and then it is called "Net Salary". If your salary slip indicates otherwise, then you can check with your finance department about the proper wording in the salary slip.
Best Regards,
Amod.
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Tax amount is never mentioned in the offer or appointment letter. The company provides the calculation of "take home" salary, and then deducts the tax on your behalf. If you are expecting that the offer letter should mention the taxes, then read the letter again. There must be a sentence stating that the tax arising from this salary will be deducted as per the tax rules of India.
Going beyond the professional taxes, the income tax (as it will be applicable to you, if your salary is 40K/month) can also be deducted from this salary and then it is called "Net Salary". If your salary slip indicates otherwise, then you can check with your finance department about the proper wording in the salary slip.
Best Regards,
Amod.
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In nutshell your company is not doing anything illegal, they are doing what they are supposed to. Professional Tax is deductible from the Salary
From India, Ahmadabad
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From India, Ahmadabad
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Dear
The Professional tax is to be deducted from Gross Salary only. Every state have their fixed PT Slabs.
Salary for the month in Rs Profession Tax for the month in Rs
Less than or equal to 7,500 Nil
7,501 to 10,000 175
10,001 and above 200 per month except for February (Rs 300 for February)
Profession Tax Penalties
- Delays in obtaining Enrollment , a penalty of Rs. 2/per day and for Registration, a penalty of Rs. 5/- per day.
– Providing false information regarding enrollment – Penalty of 3 times of tax amount.
– Non-payment or late payment of profession tax – Penalty is equal to 10% of the amount of tax to be imposed.
– Late filing of Returns – Penalty of Rs. 300 per return.
Profession tax are exempted in the following cases,
1. Senior Citizen above 65 years age is tax exempt.
2. Person suffering from permanent physical disability.
3. Parent of a child suffering from physically disability.
4. Parent of a mentally retarded child.
From India, Hyderabad
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The Professional tax is to be deducted from Gross Salary only. Every state have their fixed PT Slabs.
Salary for the month in Rs Profession Tax for the month in Rs
Less than or equal to 7,500 Nil
7,501 to 10,000 175
10,001 and above 200 per month except for February (Rs 300 for February)
Profession Tax Penalties
- Delays in obtaining Enrollment , a penalty of Rs. 2/per day and for Registration, a penalty of Rs. 5/- per day.
– Providing false information regarding enrollment – Penalty of 3 times of tax amount.
– Non-payment or late payment of profession tax – Penalty is equal to 10% of the amount of tax to be imposed.
– Late filing of Returns – Penalty of Rs. 300 per return.
Profession tax are exempted in the following cases,
1. Senior Citizen above 65 years age is tax exempt.
2. Person suffering from permanent physical disability.
3. Parent of a child suffering from physically disability.
4. Parent of a mentally retarded child.
From India, Hyderabad
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The employee is responsible to pay the taxes like PT and TDS, and it is the responsibility of the employer to deduct them from your salary in a timely manner and ensure they are paid. In the appointment letter, the employer may only highlight statutory deductions such as EPF, ESIC, and SWWF.
From India, Ernakulam
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From India, Ernakulam
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Hello Sir,
Good evening.
I am confused about the profession tax. Form 16 deducts Profession tax and PF from the Gross salary to calculate the Net Salary. I want to file my salary Income tax return in India, but I am confused about the profession tax. Can you please guide me on whether profession tax is deducted from the gross salary or not on the Income tax return sheet (ITR I)?
If it is deducted, please let me know under section 80C & 80CC or what?
Regards,
Laxman
Email: laxmanparmar41@gmail.com
From Nigeria, Lagos
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Good evening.
I am confused about the profession tax. Form 16 deducts Profession tax and PF from the Gross salary to calculate the Net Salary. I want to file my salary Income tax return in India, but I am confused about the profession tax. Can you please guide me on whether profession tax is deducted from the gross salary or not on the Income tax return sheet (ITR I)?
If it is deducted, please let me know under section 80C & 80CC or what?
Regards,
Laxman
Email: laxmanparmar41@gmail.com
From Nigeria, Lagos
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I M so confused about Profession tax deduction. i want to know profession tax in decide on fix salary of employee or actual salary????? please let me know
From India, Ahmedabad
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From India, Ahmedabad
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Hello,
I have some doubts regarding Professional Tax. I am working in a company registered in the USA, and I am based in Pune. My offer letter states the company name as Inc., not Pvt Ltd. Additionally, they do not deduct Professional Tax from my salary.
I would like to know if this is acceptable or if there is an issue with this arrangement. Any assistance or clarification on this matter would be greatly appreciated.
Regards,
Abhinav
From India, Pune
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I have some doubts regarding Professional Tax. I am working in a company registered in the USA, and I am based in Pune. My offer letter states the company name as Inc., not Pvt Ltd. Additionally, they do not deduct Professional Tax from my salary.
I would like to know if this is acceptable or if there is an issue with this arrangement. Any assistance or clarification on this matter would be greatly appreciated.
Regards,
Abhinav
From India, Pune
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(Fact Checked)-The user reply is mostly correct. Professional Tax can be deducted from the salary. However, the specific method of deduction (from gross or net salary) may vary based on company policy or state regulations. (1 Acknowledge point)