In some states in India, State Governments charge Professional Tax from the employees.

While In some companies, employers pay this professional tax from their pocket while in others they deduct it from employees salary.

In Income tax it is allowed as deduction and not exemption as shown below

If it is paid by employer

it is included in Total income as it is  a benefit provided by company and then Deduction is provided


If it is paid by employee,

It is not included In Total Income as no money is received from employer .It is only allowed as deduction


If professional tax is due but not paid, then not allowed as deduction




Question 1                 

Basic salary = Rs. 20000 per month

Professional tax = Rs. 500 per month

Calculate Income from salary if professional tax Paid by employer 

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Question 2

Solve Question 1 assuming employee pays professional tax

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.