Professional tax

Profession Tax is the Tax deducted from the salary paid to employees.

Let me take an example to make it more clear. Suppose B Co. has hired Mr. A as the employee of the company with an monthly gross salary of Rs 1,00,000. Break up of salary

Basic Salary 60000

HRA 30000

conveyance 10000

Now company has to deducted professional tax say Rs 200 and TDS 1300 from the salary of the employee and should be paid to concerned authority on the relevant due date.

The accounting for the same is as follows:-

Salary cost    A/c Dr.  1,00,000

    To P.T payable                        200

    To TDS payable                     1300

    To Employee payable           98500

By this entry gross expenditure of the company is debited to salary account and statutory liability that is Profession tax and TDS are shown as payable and the remaining net salary will be payable to employee.

At the time of making payment of professional Tax on due date:-

P.T. payable a/c        200

        To Bank a/c               200                           

professional tax is deductabale from the salary of the empolyeee then payment to deprtment from bank

salary a/c   dr                100

to bank                                               98

To  profeessiuonal tax                      2

if pt for company then it terate exp for the company

professional tax open under head off & admin exp

PT  DR   to BANK

Dear sir,

Thank you, please tell me the procedure of pt registration & other related to this.

thanks & regards

Jayashankara H R