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Former Member
Jun 04, 2013 at 03:34 PM

Prof tax deduction from Salary + Incentives


Dear Expert,

Kindly guide for given below requirement :

Profession tax deduction from Incentive and Salary : We are already deducting a profession tax from the salary but we have not started to deduct from the Incentives. As per statutory norms we need to deduct the P.Tax from incentives also. In this case we have to combine the total amount of Salary and Incentive and then calculate the Profession tax over it. From salary, the tax gets deducted from system, while for Incentives we have to calculate the difference amount and deduct from the incentive and pay.This is to be implemented from April 2013 onwards, but since we have not done this compliance we will have to calculate the P.Tax for April and deduct it from May incentives of our employees. For May the new system will be followed.

For eg : If the salary is 8000/- the P.Tax deducted will be 175/- and if his incentive figure goes above 10000/- he goes in the slab of 200/-.
Hence the difference of 25/- rupees is to be deducted from the Incentive amount.