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
Note:-
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
View answer
| Particulars | Amt |
| Basic Salary (20000*12) | 240000 |
| Add professional tax (500*12) | 6000 |
| Gross Taxable Salary | 246000 |
| Less – Deductions for professional Tax | 6000 |
| Income from Salary | 240000 |
Question 2
Solve Question 1 assuming employee pays professional tax
View answer
| Particulars | Amt |
| Basic Salary | 240000 |
| Total | 240000 |
| Less – Deductions | |
| For professional tax | 6000 |
| Income form Salary | 234000 |