About Professional Tax

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Mukund Patel (Querist)
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17 June 2009 professional tax is calculated on Basic salary or Gross salary ?

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CA Binal Shah

CA Binal Shah (Expert)
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17 June 2009 hi,

It is calculated on basic salary

Nazir

Nazir (Expert)
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18 June 2009 Dear Mukund,

As Professional tax is always state specific and the definitionof salary or wages may vary from state to state.

But on a general basis following is the definition :

Salary or Wages includes pay, dearness allowance and all other remunerations including allowances received by any person on a regular basis whether payable in cash or kind and also includes perquisites and profits in lieu of salary as defined in Section 17 of the Income Tax Act, 1961 (No. 43 of 1961) but does not include bonus in any form and on any account, gratuity and pension]

On the basis , all the components of the salry structure defined by you are [paid to the employees are paid on a regular basis. Hence Professional tax shall be levied on The gross salry and not on Basic only.

Nazir