Is Profession tax on Bonus and leave wages applicable in Maharashtra

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ENGINEERING DOCUMENTARIES (Querist)
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27 March 2023 Should we add the bonus and leave wages to salary account to calculate the Profession Tax payable in Maharashtra during the F.Y. 2022-23

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 Yes, in Maharashtra, when calculating the Profession Tax payable for the financial year 2022-23, both bonus and leave wages are considered part of the salary. Therefore, you should add these components to the salary amount when determining the total salary for the purpose of calculating Profession Tax.

Profession Tax in Maharashtra is levied based on slabs determined by the monthly gross salary or wages, which includes all components such as basic salary, allowances, bonus, commissions, overtime pay, and any other payments received by the employee.

Here are the key points to consider:

1. **Components of Salary:** Include all components received by the employee during the financial year, such as basic salary, allowances, bonus (including statutory and non-statutory bonuses), leave wages, commissions, etc.

2. **Calculation Basis:** The Profession Tax slab rates are based on the monthly salary or wages. For example, for males, the tax rate ranges from Rs. 175 to Rs. 2,500 per month depending on the monthly salary bracket.

3. **Annual Calculation:** When calculating Profession Tax for the financial year 2022-23, sum up all earnings subject to Profession Tax from April 2022 to March 2023, including bonuses and leave wages.

4. **Payment and Compliance:** Ensure timely payment and filing of Profession Tax returns as per Maharashtra state regulations to avoid penalties and maintain compliance.

By including bonuses and leave wages in your calculation, you ensure that your Profession Tax liability is accurately determined and duly paid as per legal requirements in Maharashtra.