Professional tax exemption section

In some states in India, State Governments charge Professional Tax from the employees. While In some companies, employers pay this professional tax from their pocket while in others they deduct it from employees salary. In Income tax it is allowed as deduction and not exemption as shown below If it is paid by employer it is included in Total income as it is a benefit provided by company and then Deduction is provided If it is paid by employee, It is not included In Total Income as no money is received from employer .It is only allowed as deduction Note:- If professional tax is due but not paid, then not allowed as deduction Question 1 Basic salary = Rs. 20000 per month Professional tax = Rs. 500 per month Calculate Income from salary if professional tax Paid by employer

We start by understanding Section 194J of The Income Tax Act 1961. We add the Meaning of Professional Services Under Section 194J, then discuss the Amendments in TDS Section 194J. Then we discuss who is Liable to Deduct TDS Under Section 194J. Then we discuss the Rate of TDS Deduction Under Section 194J. And then the time factor. TDS stands for ‘Tax Deducted at Source’ and is covered under section 194J of the Income Tax Act of 1961. It essentially refers to a deduction required when a person is paying fees to a resident for particular services. This deduction must be made under specific conditions and for specific services that we will explain further in this article. Continue reading to learn more about the TDS on professional fees and critical regulations regarding the same. Section 194J Specifically, section 194J of the Income Tax Act, 1961: https://incometaxindia.gov.in/pages/acts/income-tax-act.aspx stipulates the rules regarding tax deducted at source (TDS) on various technical and professional services fees. As part of the advance tax deduction, TDS is deducted at the applicable rate before the payment for any professional or technical service is completed. Amendments To Section 194J Section 194J of the TDS has been amended as part of the Finance Bill 2020. These include: • In the case of fees for technical services (which are not considered professional services), tax will be deducted at the rate of 2%. In all other cases, the rate will be up to 10%. • An individua...

• Section 80C: This is the most commonly availed deduction by individuals. Investments made in Employees’ Provident Fund, Life insurance premium paid, Public Provident Fund, principal home loan repayment etc. are part of this deduction. The maximum amount available under section 80C is 1.5 lakh in a financial year. • Section 80CCD (1b): This deduction is available for investment made in the NPS account. The maximum deduction that can be claimed under this section is Rs 50,000. • Section 80D: This deduction is available for premium paid on medical insurance policy. An individual can claim maximum deduction of Rs 25,000 for insurance premium paid for self, spouse and dependent children. For senior citizens, the maximum deduction is Rs 50,000. • The leave travel allowance (LTA) exemption, which salaried employees can currently take advantage of twice every four years. • House rent allowance (HRA), which is typically paid to employees as part of their pay. If the person was residing in rented housing, this might be claimed as tax-exempt up to specific defined limits. • Deduction available under section 80TTA/80TTB will not be available to the taxpayers. • Deduction for entertainment allowance (for government employees) and employment/professional tax as contained in section 16. • Tax deduction for interest paid on housing loan: As the property was self-occupied or vacant, interest paid on a housing loan for such a property might be deducted from income from house property resu...