Hi All,
I do have a doubt..If the CTC is between Rs.1,00,000 to Rs.2,00,000/-, how much would be the Medical allowance??? will it be 750 or 1250... or it doesn't depend on CTC...
I also want to know how to calculate Professional Tax..is it calculated on Gross Salary or on Net Salary....If we calculate it on Net Salary, what problems an employer can face while filing the tax...
Please clarify the above mentioned doubts... I need a quick response as have to process the payroll...
Waiting for the response...
Thanks,
-Neha
From India, Hyderabad
1I do have a doubt..If the CTC is between Rs.1,00,000 to Rs.2,00,000/-, how much would be the Medical allowance??? will it be 750 or 1250... or it doesn't depend on CTC...
I also want to know how to calculate Professional Tax..is it calculated on Gross Salary or on Net Salary....If we calculate it on Net Salary, what problems an employer can face while filing the tax...
Please clarify the above mentioned doubts... I need a quick response as have to process the payroll...
Waiting for the response...
Thanks,
-Neha
From India, Hyderabad
Dear Friends,
1. Medical allownace is nothing to do with the CTC. whatever you fix the medical allowance to make total gross salary to be paid to the employees is valid and ok. Rs. 1250 p.m is taken for the purpose of Income Tax Exemption which is exempt under IT tax while calcualting income tax of the employee. please note that if it is paid with salary and word Medical Allowance is used in salary slip being fixed, it is taxable in all case. Only Medical Reimbursment which is paid Rs. 15000/- per year is exempt as per IT Act.
Thus, If Medical Allowance is fixed-Taxbale
If Variable and Reimbursement-Tax free up to 15000/- in a year
Above that taxable in all case.
Whataver is fixed with salary, its OK.
2. Professional Tax is on Gross Salary and if it is paid by Employer and not deducted from the employee salary, it is treated as perquisite and added in his total salary. however, under section 16(iii), it is deducted from the salary like standard deduction. thus, if paid by employer, it will be added first and then deduction will be given. if paid by employee, neither added nor deducted.
From India, Gurgaon
1. Medical allownace is nothing to do with the CTC. whatever you fix the medical allowance to make total gross salary to be paid to the employees is valid and ok. Rs. 1250 p.m is taken for the purpose of Income Tax Exemption which is exempt under IT tax while calcualting income tax of the employee. please note that if it is paid with salary and word Medical Allowance is used in salary slip being fixed, it is taxable in all case. Only Medical Reimbursment which is paid Rs. 15000/- per year is exempt as per IT Act.
Thus, If Medical Allowance is fixed-Taxbale
If Variable and Reimbursement-Tax free up to 15000/- in a year
Above that taxable in all case.
Whataver is fixed with salary, its OK.
2. Professional Tax is on Gross Salary and if it is paid by Employer and not deducted from the employee salary, it is treated as perquisite and added in his total salary. however, under section 16(iii), it is deducted from the salary like standard deduction. thus, if paid by employer, it will be added first and then deduction will be given. if paid by employee, neither added nor deducted.
From India, Gurgaon
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Professional tax hyderabad.doc
Professional Tax.zip
Professional Tax 01-Apr-2009.pdf