The Karnataka government has recently amended the Professional Tax regulations, bringing about significant changes for employees and businesses in the state. The Karnataka Tax on Profession, Trades, Calling & Employments (Amendment) Act, 2023 received the Governor’s assent on 13th March 2023 and is effective from 1st April 2023. In this blog post, we will discuss the important aspects of this amendment, focusing on the increased exemption limit and the new professional tax slabs.
Increased Exemption Limit
The amendment has increased the exemption limit for Professional Tax from Rs. 15,000 to Rs. 25,000. Prior to the amendment, employees with gross wages of Rs. 15,000 and above were required to pay Rs. 200 per month as Professional Tax. With the new changes in place, employees drawing wages up to Rs. 24,999 are now exempt from paying Professional Tax in Karnataka.
New Professional Tax Slabs in Karnataka:
The revised Professional Tax slabs, effective from 1st April 2023, are as follows
| S.No | Salary Range | Professional Tax Rate |
|---|---|---|
|
1. |
Monthly Salary (Gross) below Rs. 25,000 |
No Professional Tax |
|
2. |
Monthly Salary (Gross) of Rs. 25,000 and above |
Rs. 200 Per Month |
In addition to the changes in the exemption limit and tax slabs, the amendment also modifies the percentage provisions for delayed interest payments, escaped tax, and other related aspects.
The recent amendment to the Professional Tax in Karnataka comes as a welcome change for employees earning up to Rs. 24,999, as they are now exempt from paying this tax. This change not only simplifies the tax structure but also provides financial relief to those in the lower income bracket. If you are an employee or employer in Karnataka, it is crucial to stay updated with these changes to ensure compliance with the new Professional Tax regulations.