Quick Answer: How Can I Reduce My Professional Tax?

How can I save my professional tax?

The maximum amount of professional tax that can be levied by a state is Rs 2,500.

It is usually deducted by the employer and deposited with the state government.

In your income tax return, professional tax is allowed as a deduction from your salary income..

How can I save my tax in 2020 21?

Tips for Saving Tax in FY 2020-21Invest in Equity-Linked Saving Scheme (ELSS)Invest in the National Pension Scheme.Invest in Sukanya Samriddhi Yojna.Know When to Opt for the New Tax Regime.

What is tax free salary?

# Salary paid tax free – Tax free salary means the salary on which income tax is borne not by the employee but by the employer. Tax free salary is also taxable in the hands of the employee. Salary is taxable in the year of receipt or in the year of earning of the salary income, whichever is earlier.

Which country has the highest tax rates?

SwedenThe highest marginal tax rate is found in Sweden, 76 percent, and the lowest in Bulgaria, 29 percent. In general, the Nordic and the Western European countries have the highest effective tax rates.

What is PT in salary slip?

From Wikipedia, the free encyclopedia. Profession tax is the tax levied and collected by the state governments in India. It is a indirect tax. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc.

How can I legally not pay taxes?

How to Reduce Taxable IncomeContribute significant amounts to retirement savings plans.Participate in employer sponsored savings accounts for child care and healthcare.Pay attention to tax credits like the child tax credit and the retirement savings contributions credit.Tax-loss harvest investments.More items…•

How do I pay less taxes Self Employed?

How to Avoid Self Employment Tax & Ways to Reduce ItForm an S Corporation. (Kitco) … Subtract Half of Your FICA Taxes From Federal Income Taxes. (kennejima) … Deduct Valid Business Expenses. (Muffet) … Deduct Health Insurance Costs. (CarbonNYC) … Defer Income to Avoid Higher Tax Brackets. (wwarby)

Which country is tax free?

Some of the most popular countries that offer the financial benefit of having no income tax are Bermuda, Monaco, the Bahamas, Andorra and the United Arab Emirates (UAE).

Is Dubai Tax Free salary?

Dubai does not levy an income tax on residents’ earnings in the same way that many other countries do. That’s one of the things that makes it an amazing expat destination. However, that fact doesn’t mean that Dubai is completely tax-free. … The tax system in Dubai is extremely favourable to residents.

Who is liable for professional tax?

In case of Salaried and Wage earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.

Is professional tax exempted?

Like any tax, professional tax is a source of revenue for the government. … Professional tax is a tax paid by all professionals and working individuals of companies falling under certain categories. This tax is compulsory and the amount paid towards professional tax is exempt from income tax.

How is PT calculated?

How is PT calculated in Karnataka? In Karnataka, professional tax is calculated on the total income. … If this amount exceeds INR 15,000 per month, then an individual is liable to pay INR 200 as tax.

What happens if professional tax is not paid?

In case there is a delay in payment of professional tax, the state government of Karnataka will charge 1.25% per month for late payment. However, the maximum penalty the state will charge is 50% for late payment of the total unpaid professional tax amount.

How can I reduce my taxable income?

1. Use up your Rs 1.5 lakh limit under Section 80C1.Tax-Saver FDs : You can get a tax deduction of up to Rs 1.5 lakh under 5 year tax-saver FDs. … PPF (Public Provident Fund): Public Provident Fund is a government established savings scheme with a tenure of 15 years available at most banks and post offices in India.More items…•

What is the amount of professional tax deducted?

Which states impose professional tax and what are the tax slabs?StateIncome per MonthTax Rate/Tax Amount (per month)KarnatakaUp to Rs. 15,000NilRs. 15,001 onwardsRs. 200Kerala (Half yearly income slabs and half yearly tax payment)Up to Rs.11,999NilRs.12,000 to Rs.17,999Rs.12028 more rows

How much can I reduce my taxable income?

If you can max out both your 401(k) and IRA, you’d be able to reduce your taxable income by $25,000 or $32,000 if you’re over 50. If you’re in the 24% tax bracket, this would mean saving up to $6,000 or $7,680 if you max out catch-up contributions too. That’s a huge amount of tax savings.

How do you get the most money back on taxes?

Don’t take the standard deduction if you can itemize.Claim your friend or relative you’ve been supporting.Take above-the-line deductions if eligible.Don’t forget about refundable tax credits.Contribute to your retirement to get multiple benefits.

How is PT salary calculated?

How Professional Tax is Calculated. A professional tax is calculated on the basis of your salary and predetermined slabs. You can have to pay anything between ₹ 200 to ₹ 2500 a month.