Is Professional Tax Calculated On Gross Salary Or Net Salary?

How is tax calculated on salary?

How to use the Income tax calculator for FY 2020-21 (AY 2021-22)?Choose the financial year for which you want your taxes to be calculated.Select your age accordingly.

Click on ‘Go to Next Step’Enter your taxable salary i.e.

salary after deducting various exemptions such as HRA, LTA, standard deduction, and so on.

(More items….

How is professional tax calculated?

How professional tax is calculated?Step 1: Consider if the professional tax is applicable in the state of residence.Step 2: If yes, determine the tax amount based on monthly income.Step 3: Look at the tax slab rates according to your salary.

What is salary as per 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 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.

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.

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 happens if professional tax is not paid?

Profession Tax in Karnataka 200 p.m. Consequences for late payment or non payment: For late payment of PT, interest @ 1.25% p.m. is levied and the state may also impose a penalty of 50% of the total amount due.

How can I save my tax in 2020 21?

Let’s dive in!Ways to save on your income taxes. … Contribute to the National Pension System (NPS) … Get deduction on interest paid on your home loan. … Secure some amount for future. … National Saving Certificate. … Pay for health insurance. … Contribute a bit into charitable institutions. … Public Provident Fund (PPF)

Is professional tax applicable on gross salary or net salary?

As per the Karnataka Professional Tax Slab Rates, all individuals with a monthly gross income less than Rs. 15,000 are exempted from any charges. However, employees with a monthly gross salary above Rs. 15,000 are levied a professional tax of Rs.

Is professional tax deducted every month?

Professional tax is calculated every month based on your gross salary for that month. … The professional tax will be levied on this amount of Rs. 40,000. So, each month based on the increase or decrease of your gross salary, your professional tax slab will also differ and accordingly, your employer will deduct this tax.

Is professional tax exempted?

Like any tax, professional tax is a source of revenue for the government. … Professional tax is a tax paid by all professionals and working individuals of companies falling under certain categories. This tax is compulsory and the amount paid towards professional tax is exempt from income tax.

Is professional tax part of 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?

It is levied on employees, a person carrying on business including freelancers, professionals, etc., subject to income exceeding the monetary threshold if any. As per Article 246 of the Constitution of India, only Parliament has the exclusive power to make laws with respect to Union List which includes taxes on income.

What is CTC salary?

Cost to company (CTC) is a term for the total salary package of an employee, used in countries such as India and South Africa. It indicates the total amount of expenses an employer (organisation) spends on an employee during one year. … Employees may not directly receive the CTC amount.

What is tax free salary?

# Salary paid tax free – Tax free salary means the salary on which income tax is borne not by the employee but by the employer. Tax free salary is also taxable in the hands of the employee. Salary is taxable in the year of receipt or in the year of earning of the salary income, whichever is earlier.

Can professional tax be refunded?

PT can be claimed as deduction u/s 16(iii) to the extent it is paid in a FY irrespective of the period for which it is paid. So in this case, you can claim this deduction for next year.

How is professional tax deducted from salary?

Professional Tax The maximum amount of professional tax that can be levied by a state is Rs 2,500. It is usually deducted by the employer and deposited with the state government. In your income tax return, professional tax is allowed as a deduction from your salary income.