Understanding Professional Tax (PT) and Tax Deducted at Source (TDS)
I just want to know what PT is and why we are deducting it. (Professional Tax is Rs. 150 for income between Rs. 15,000/- to Rs. 19,999/-, and Rs. 200 for income of Rs. 20,000 and above). Also, when we send it to SBI, what is the objective of PT? Additionally, what is the objective of TDS?
Regards,
From India, Hyderabad
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3I just want to know what PT is and why we are deducting it. (Professional Tax is Rs. 150 for income between Rs. 15,000/- to Rs. 19,999/-, and Rs. 200 for income of Rs. 20,000 and above). Also, when we send it to SBI, what is the objective of PT? Additionally, what is the objective of TDS?
Regards,
From India, Hyderabad
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Your question is not very clear. You are asking what the objective of PT is; simply put, it is a tax on employment. TDS, on the other hand, makes the payee responsible for deducting a certain amount and paying it to the government treasury before passing the remaining amount to the beneficiary. Additionally, the payee should issue a certificate to reflect the extent of the deduction.
Regards,
Ramakant
From India, Pune
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Regards,
Ramakant
From India, Pune
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TDS
Tax Deducted at Source (TDS), as the name implies, aims at the collection of revenue at the very source of income. It is essentially an indirect method of collecting tax, which combines the concepts of "pay as you earn" and "collect as it is being earned." Its significance to the government lies in the fact that it advances the collection of tax, ensures a regular source of revenue, and provides for a greater reach and wider base for tax. At the same time, for the taxpayer, it distributes the incidence of tax and provides a simple and convenient mode of payment.
The concept of TDS requires that the person on whom responsibility has been cast is to deduct tax at the appropriate rates from payments of specific nature being made to a specified recipient. The deducted sum is required to be deposited to the credit of the Central Government. The recipient, from whose income tax has been deducted at source, gets the credit of the amount deducted in their personal assessment based on the certificate issued by the deductor.
PT
Professional Tax is a tax levied by the State on the income earned by way of profession, trade, or employment. This tax is levied based on slab rates depending on the income of the individual. This tax is similar to income tax, except for the fact that Income Tax is collected by the Central Government, and Professional Tax is collected by the State Government.
Any amount paid as professional tax to the State Government is allowed as a deduction under Sec-16 of the Income Tax Act, and Income Tax on the balance amount is levied as per the Income Tax slab rates in force.
Hope the difference shown above clarifies your queries.
Info. Source: en.wiki
Regards,
S.N.Raju.U.
From India, Hyderabad
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Tax Deducted at Source (TDS), as the name implies, aims at the collection of revenue at the very source of income. It is essentially an indirect method of collecting tax, which combines the concepts of "pay as you earn" and "collect as it is being earned." Its significance to the government lies in the fact that it advances the collection of tax, ensures a regular source of revenue, and provides for a greater reach and wider base for tax. At the same time, for the taxpayer, it distributes the incidence of tax and provides a simple and convenient mode of payment.
The concept of TDS requires that the person on whom responsibility has been cast is to deduct tax at the appropriate rates from payments of specific nature being made to a specified recipient. The deducted sum is required to be deposited to the credit of the Central Government. The recipient, from whose income tax has been deducted at source, gets the credit of the amount deducted in their personal assessment based on the certificate issued by the deductor.
PT
Professional Tax is a tax levied by the State on the income earned by way of profession, trade, or employment. This tax is levied based on slab rates depending on the income of the individual. This tax is similar to income tax, except for the fact that Income Tax is collected by the Central Government, and Professional Tax is collected by the State Government.
Any amount paid as professional tax to the State Government is allowed as a deduction under Sec-16 of the Income Tax Act, and Income Tax on the balance amount is levied as per the Income Tax slab rates in force.
Hope the difference shown above clarifies your queries.
Info. Source: en.wiki
Regards,
S.N.Raju.U.
From India, Hyderabad
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