What is Professional Tax – IT Provisions for PT

What is ProfessionalProfessional Tax or PT is state based. Different states have different rates and methods of calculation. Any one having income from Salary or practicing chartered accountants, lawyers, doctors etc are required to pay it to their respective state government as per the rules and regulations framed by them.

It is also called employment tax and allowed as a deduction from the gross income before computing your IT liability. You should not get confused between both. IT is calculated on your total income and paid to IT department (central government) which is managed at our country level. PT is paid at state level. 

Different states have different limit of exemption. You will be liable to pay it only when you crossed this exemption limit. To know more on this provision you need to look into your state act that prescribe it and its exemption limit.

It’s deducted from your salary by the employer and such amount is deposited to the state government. Even though its deducted and deposited by your employer, you as an individual will be liable for it.

It is allowed as an IT deduction from your salary income under section 16 of IT act. You need to deduct your PT amount paid during the year from your salary income before arriving at your gross total income. From that you need to claim you IT deduction available from section 80C to 80U if any and then calculate your income tax on it.

Please remember PT is allowed as a deduction before arriving at gross income not after arriving at gross income.

If you are a self employed person running a profession of chartered accountancy or a lawyer etc and liable to pay professional tax then you should apply for registration in the prescribed form of your respective state government. You can get details on this for your respective state’s website. However, we have given a list below for your reference;

Karnataka

Maharashtra

West Bengal

Tamilnadu

Andhra Pradesh

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