Quick Answer: How Is Professional Tax Deducted From Salary?

What is the formula to calculate net pay?

Net Salary = Gross salary – All deductions like income tax, pension, professional tax, etc.

Net salary is also referred to as Take Home Salary..

What is deducted from gross salary?

Gross Salary: Subtract gratuity and the employee provident fund (EPF) from Cost to Company (CTC), the amount that you get is your Gross Salary. It is the amount that you get before deduction of income taxes and other deduction such as bonus, overtime pay, holiday pay etc.

Why is professional tax deducted from salary?

However, professional tax though is a kind of tax on income is levied by State Government (not all states in the country chose to levy professional tax). … It may be noted that professional tax is a deductible amount for the purpose of Income-tax Act, 1961 and can be deducted from taxable income.

Is professional tax calculated on gross salary or net salary?

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.

What is the rule of professional tax?

Profession Tax Rates in Key States of IndiaStateIncome per MonthTax Rate/Tax Amount (p.m.)KarnatakaUp to Rs. 15,000NilRs. 15,001 onwardsRs. 200Kerala (Half yearly income slabs and half yearly tax payment)Up to Rs.11,999NilRs.12,000 to Rs.17,999Rs.12028 more rows•Apr 25, 2020

What is PT in salary slip?

When you look at your payslip or salary slip, along with the deduction column, you will notice a deduction marked as “PT”. PT or Professional Tax, as it is called, is a tax paid to the state government. … Each state will have separate PT rates. Also, not all states collect or impose Professional Tax.

What is CTC in hand salary calculation?

How to calculate your take-home salary?Step 1: Calculate gross salary. Gross Salary = CTC – (EPF + Gratuity)Step 2: Calculate taxable income. Taxable Income = Income (Gross Salary + other income) – Deductions. … Step 3: Calculate income tax** … Step 4: Calculating in-hand/take home salary.

Is professional tax and TDS same?

In this case Icome Tax amount deduct when payment made and salary by prescribed Percentage according to income tax. 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.

How much professional tax is deducted from salary?

Which states impose professional tax and what are the tax slabs?StateIncome per MonthTax Rate/Tax Amount (per month)KarnatakaUp to Rs. 15,000NilRs. 15,001 onwardsRs. 200Kerala (Half yearly income slabs and half yearly tax payment)Up to Rs.11,999NilRs.12,000 to Rs.17,999Rs.12028 more rows

Is professional tax included in CTC?

Professional Tax is a statutory and mandatory deduction which is made from employee’s monthly salary. Professional \tax is deducted from the stipend of the trainee also. Hence you cannot claim it as a part of your CTC but yes, it is mandatory deducted by the company.

Who is liable for professional tax?

A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. Different states have different rates and methods of collection. In India, profession tax is imposed every month.

Which is better CTC or gross salary?

Gross salary is the amount after the EPF and gratuity are subtracted from the CTC. Basically, the remuneration paid before deducting the income tax, professional tax, and other deductions. It is inclusive of bonuses, overtime pay, paid holiday amount, and other differentials.

How gross salary is calculated?

To calculate an employee’s gross pay, start by identifying the amount owed each pay period. Hourly employees multiply the total hours worked by the hourly rate plus overtime and premiums dispersed. Salary employees divide the annual salary by the number of pay periods each year. This number is the gross pay.