Question
I notice a small PT deduction on my payslip and want to know what it is and whether it has a cap.
Answer
Professional tax is a state-level tax on employment deducted by your employer from your salary and paid to the state government. It is not a central tax, so rates and slabs vary by state, and a few states (such as Delhi, Haryana and UP) levy none at all. The amount is capped at Rs 2,500 per year under Article 276 of the Constitution. In Maharashtra, for instance, it is Rs 200 a month and Rs 300 in February. Professional tax is deductible from salary income under Section 16(iii), but only under the old tax regime.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.