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Professional Tax - Deduction

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(Querist)
24 March 2009 A company has deducted arrear Professional Tax from employees pertaining to FY 2007-08 in the FY 2008-09 as there was a change of basis suggested by the P. Tax authorities.

Can the same be allowed as a decuction in the Form 16 of the employees for FY 2008 -09.
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C.A.Javid Patel

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C.A.Javid Patel (Expert)
24 March 2009 As per the Income Tax Act Profession Tax is allowed as deduction on payment basis. And there is no any such imit of Rs.1500 and hence Profession Tax pertains to FY 07-08 and FY 08-09 can be deducted in the form 16 for FY 80-09.
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Manmohan ACA, CS

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Manmohan ACA, CS (Expert)
24 March 2009 Tax on employment, profession, trade, etc. levied by a State under Article 276 of the Constitution will be allowed as deduction on cash basis u/s 16, whether paid by employee or by employer (on behalf of employee) from gross taxable salary.


hence tax paid in current yr for previous year is allowed if paid
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