Professional Tax in India

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Reading Time: 5 minutes| (Last Updated On: February 5, 2019)

Professional Tax in India

Professional Tax is a tax imposed by some of the state governments in India on persons earning income from salary or practicing professional such as Chartered Accountant, Company Secretary, Lawyer, Doctor etc. The state government derive the power to impose professional tax under Article 276 of the Constitution of India. The professional tax is levied by particular Municipal Corporation; however the Parliament of India have placed a ceiling of Rs. 2,500/- as the maximum amount which can be collected as professional tax in the year. The professional tax is based on slab which differ from state to state. In case of employees it is deducted from salary by the employer which then deposit to the professional tax department, however in case of company, Director of a Company, LLP, designated partners or partners of LLP, partnership firm, individual partner, self-employed professional or owners of any business the professional tax depends upon gross turnover in the preceding year. Professional Tax in India

Professional Tax in India

The persons falling under the ambit of professional tax and the employers employing staff for their business need to obtain registration with appropriate department designated for the purpose of compliance of professional tax in a particular state within 30 days of coming under the purview of the applicability of professional tax. Each professional, the Directors of Company, designated partners of the LLP or any other employer is under obligation to seek above mentioned registration and to ensure that professional tax is deducted from the salary of employees or deposited on behalf of others. The deducted professional tax from the employees must be deposited in the appropriate office designated by the state government and a return of professional tax must be filed specifying the payment of professional tax.

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Following is list of states and Union territories have does not levy tax on profession,
Name of State Union Territories
1. Arunachal Pradesh. 10. Andaman & Nicobar
2. Haryana 11. Chandigarh
3. Himachal Pradesh 12. Dadar & Nagar Haveli
4. Jammu & Kashmir 13. Daman & Diu
5. Punjab 14. Delhi
6. Rajasthan 15. Lakshadweep
7. Nagaland
8. Uttaranchal 16. Puducherry
9. Uttar Pradesh

To put it simply apart from above states mentioned above all the other state government imposes Professional Tax on every single earning person in India in the name of Profession or Trade. The tax calculation an amount to be collected may vary from one state to another. However, it has to be limited to Rs. 2,500/- per year as explained earlier.

The Professional Tax Rates for the state of Karnataka and Maharashtra is provided below, however, for the rates of other states you may click here

Karnataka Professional Tax Rates/Slab

All working individual and self-employed professional like Doctor, Lawyer, Architect, Chartered Accountant, Company Secretary or any other individual engaged in any private profession is required to pay Professional Tax. Apart from above mentioned individuals Corporations, Companies or corporate bodies, LLP, Firm, Society, HUF, Club or Association is also required to pay Professional Tax. Every professional other than salary individual is required to pay the tax as per schedule prescribed by the state of Karnataka known as tax on professions, trades calling and employments. However, on salary or wage earner the professional tax as on a slab which is as under:

Karnataka Professional Tax Slab Rates 2014-2015

Monthly Gross Salary Amount Payable as Professional Tax (P.M.)
Up to Rs. 10,000/- Up to Rs. 10,000/-
Rs. 10,000 to Rs. 14,999 Rs. 10,000 to Rs. 14,999
Rs. 15,000/- and above Rs. 15,000/- and above

Karnataka Professional Tax Slab Rates 2015-2016

Monthly Gross Salary Amount Payable as Professional Tax (P.M))
Up to Rs. 15,000/- NIL
Rs. 15,000/- and or above Rs. 200/-
Following is list of states and Union territories have does not levy tax on profession,
  1. Penalty for non-registration in case of employer Rs. 1,000/- and in case of other persons like professionals, companies, Directors and Partners etc. is Rs. 500/-.
  2. Penalty for non-payment of tax by enrolled person and registered employer with the interest @ 1.25% per month and Penalty not exceeding 50% of the tax amount due.
  3. Penalty for non-filing of returns for an employer Rs. 250/-

Maharashtra Professional Tax Rate/Slab

Like other state in India, the Professional Tax in Maharashtra is also applicable for both salary and self-employed professionals to earn while working in government or private organization or under any other mode of employment. The Professional Tax Rate on salary is as under:

Professional Tax Slab Rates in Maharashtra 2014-2015

Monthly Gross Salary Amount Payable Professional Tax
Up to Rs. 7,500/- NIL
Rs. 1,000 to Rs. 10,000 Rs. 175
Above Rs.10,000/- Rs. 2,500 p.a. The amount is can be paid in the following manner:
Rs. 200 per month except for the month of February.
Rs. 300 for the month of February.

Professional Tax Slab Rates in Maharashtra 2015-2016

Monthly Gross Salary Amount Payable Professional Tax
Up to Rs. 7,500/- NIL
Rs. 1,000 to Rs. 10,000 Rs. 175
Above Rs. 10,000/- Rs. 2,500/- p.a. The payment is accepted in the following method:
Rs. 200 per month except for the month of February.
Rs. 300 for the month of February.

Professional Tax Slab Rates in Maharashtra 2016-2017

Monthly Gross Salary Amount Payable Professional Tax
Up to Rs. 7,500/- NIL
Rs. 7,501/- to Rs. 10,000/- Rs. 175
i) Above Rs. 10,001/-
ii) Women who earn Salary up to Rs. 10,000/- per month are exempted from paying Professional Tax.
Rs. 2,500/- p.a. The payment is accepted in the following method:
Rs. 200 per month except for the month of February.
Rs. 300 for the month of February.

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