Why professional tax is deducted more in February?

Since professional tax is levied by the state government, it tends to differ for various states. Each state declares a slab and the professional tax is deducted on the basis of these slabs. February, as a month, is an exception where the tax is higher than the other months.

Is professional tax deducted every month?

Professional tax is calculated every month based on your gross salary for that month. Say your CTC is Rs. 50,000 per month, and after deduction of your EPF, gratuity, and leave deduction or payment towards any loan you may have taken from the company in the past, your gross salary comes to Rs. 40,000.

Is professional tax paid monthly or yearly?

How it is paid is by dividing the annual professional tax due into 12 equal installments that are paid every month, except the one paid in February which is higher than the other months. There may also be situations where sources of income falling under different sectors will also be liable for a separate tax.

How can I reduce my professional tax?

Save Income Tax on Salary

1. Deductions under Section 80C, Section 80CCC and Section 80CCD. Citizens of India can save tax under these 3 sections.
2. Medical Expenses.
3. Home Loan.
4. Education Loan.
5. Shares and Mutual Funds.
6. Long Term Capital Gains.
7. Sale of Equity Shares.
8. Donations.

Why is professional tax deducted?

Professional tax one source of revenue for the government and is used towards bettering the services for professionals in that state. Thus, it is essential for every employer to deduct professional tax on salary, although there are a few exemptions related to this. Professional tax in India varies from state to state.

What is the rule for 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.

What is the due date for PT payment?

If an employer has employed more than 20 employees, he is required to make the payment within 15 days from the end of the month. However, if an employer has less than 20 employees, he is required to pay quarterly (i.e. by the 15th of next month from the end of the quarter).

Why do we pay professional tax?

Can we claim refund of professional tax?

Professional tax is paid at the end of month presuming that you have carried out the profession in that month. Therefore once professional tax is paid, there can be no refund. There is generally no refund mechanism under professional tax.

How much does PT deduct from salary?

Thus, it is essential for every employer to deduct professional tax on salary, although there are a few exemptions related to this. Professional tax in India varies from state to state. The maximum amount of professional tax cannot exceed Rs. 2,500 annually.

Why do we pay professional tax in India?

Professional Tax is a state tax, imposed by a state government on account of the infrastructure it provides to you so that you can carry out your profession in that state. In a way, it is much like a toll bridge; if you use the facility, you must pay a token amount.

How interest is calculated for late payment of PT?

For late payment of PT, interest @ 1.25\% p.m. is levied and the state may also impose a penalty of 10\% of the total amount due….Profession Tax in Maharashtra: