Professional tax is a tax that is levied by the state government and applies to income you earn through employment. You can often find the deduction for the same on your salary slip each month.
How is professional tax deducted from salary?
If you are a salaried individual then as mentioned under Article 276(2) of the Indian Constitution, your professional tax will be deducted by your employer based on your salary slab from your gross income on a monthly basis and it will then be remitted to the state.
Is professional tax and TDS same?
TDS amount is like advanced Tax. Professional tax is collected by state government. … You may work in any organisation , but practicing your profession you are paying tax to the state government. The government rule is it deduct from your salary.
What is use of professional tax?
It is a tax on all kinds of professions, trades, and employment and levied based on the income of such profession, trade and employment. It is levied on employees, a person carrying on business including freelancers, professionals, etc., subject to income exceeding the monetary threshold if any.
What is the rule of professional tax?
A maximum of Rs. 2,500 can be levied as professional tax on any person per financial year. According to Section 16 (iii) of the Income Tax Act 1961, the profession tax paid by an employee is allowed as a deduction from his/her gross salary income.
Who is liable for professional tax?
In case of Salaried and Wage earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.
How is tax calculated on salary?
As his taxable income is Rs. 3,77,500, he falls in the slab of 2.5 lakhs – 5 lakhs of income tax. Thus he has to pay 10% of his net income as income tax.
|Basic Salary||25000 * 12||= 3,00,000|
|DA||4500 * 12||= 54,000|
|EA||2250 * 12||= 27,000|
|Gross Salary||= 3,81,000|
Which month is tax deductible?
“The employer is required to deposit the tax deducted within 7 days of next month and for the month of March, tax shall be deposited by 30 April of the next financial year, informs Dr. Surana. In case an employee wants no deduction of TDS or deduction at a lower rate, it is still possible.
What is TDS full name?
Tax Deducted at Source (TDS)
Is TDS equal to income tax?
Income tax is paid on the annual income with tax being calculated for that specific financial year. TDS is deducted at the time of payment of salary (or on interest on investments) either monthly or quarterly. Income tax is paid directly by the taxpayer after determining the annual liability owed.
Is TDS paid monthly?
Yes, TDS on salary is deducted every month. As per Section 192, the employer will deduct TDS on salary at the time of making the payment to the employee.
What is esic salary slip?
The Employee State Insurance (“ESI”) is a contributory fund that has contributions both from the employer and employee and enables Indian employees to take part in a self-financed, healthcare, insurance fund. … The ESI is the largest integrated need-based social insurance scheme for employees.