Hello Everyone,
I got a query in regard to the professional tax exemption under sec 16 (iii), I understand that professional tax exemption should not exceed Rs 2500 p.a for any state in a given financial year, even if we project the amount for the year.
If an employee transfer from one state to other, like employee moving from Bangalore to Chennai or Vice- versa even in that case exemption should be still restricted Rs 2500.
Please advise ,if my understanding is right.
Regards
Sandeep
The limit of Rs. 2,500/- applies in respect of total amount payable in respect of any one person to the State by way of professional tax.
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But, u/s 16(iii) of the Income Tax Act, 1961, there is no limit of deduction.
“a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 276 of the Constitution, leviable by or under any law.”
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Hence, deduction shall be allowed only on paid basis, irrespective of the year and amount.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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