Professional Tax in Madhya Pradesh

Professional Tax in Madhya Pradesh

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Professional Tax in Madhya Pradesh

The method of collection of professional tax and the rate of levy differ between the different states, given that this kind of a tax is charged (or not charged) by the respective state governments. The quantum of liability is also determined in accordance with a taxpayer’s salary, but in no case would exceed a sum of Rs. 2,500 in a given year. It is noteworthy that not every state has adopted this form of taxation. The states which have included this provision under its purview include Punjab, Karnataka, Bihar, West Bengal, Andhra Pradesh, Madhya Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, and Sikkim. In this article, we look at the various aspects of professional tax in Madhya Pradesh in detail.

Constitutional Framework

Article 276 of the Indian constitution conveys that “There shall be levied and collected a tax on professions, trades, callings and employment, by the provisions of this Act. Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in the second column of the Schedule shall be liable to pay to the State Government tax at the rate mentioned against the class of such persons in the third column of the said Schedule. Provided that entry 23 in the Schedule shall apply only to such classes of persons as may be specified by the State Government by notification from time to time.”

Deduction Responsibilities

Professional tax for salaried employees must be deducted by the employer from the remuneration of the former, and the deducted amount must be deposited to the appropriate department of the government. In addition to it, the concerned employer is required to furnish a return for the amount so deposited. The tax returns must also comprise of the proof of tax payment. The return will be nullified if the proof of payment isn’t enclosed. Self-employed individuals are required to remit their own taxes by registering under the provision.

Payment Regulations

The commercial tax department of the respective states is entrusted with the collection of professional tax. Employers who have attained the tag of the designated authority of the state government may remit their taxes in the treasury through a banking challan. The likes of others may do the same at the payment venue determined by the concerned authorities.

Coming to the timeline of payment, employers with more than 20 employees may remit their payments within 15 days from the end of the month. Employers with less than 20 employees are required to make their payments on a quarterly basis, which effectively means the 15th of the forthcoming month from the end of the quarter.

Madhya Pradesh Tax Slab

State governments use the yardstick of gross salaries to determine the liability of professional tax. Tax rates for the State of Madhya Pradesh are as follows:

Monthly Salary Tax Implications
Below Rs. 18,750 No tax levied
Between Rs. 18,750-Rs. 25,000 Rs. 125
Between Rs. 25,000-Rs. 33,333 Rs. 167
Above Rs. 33,333 208


Professional tax is not applicable for:

  • Assessees over the age of 65.
  • People suffering from 40% or more of permanent disability or blindness.
  • Parent or guardian of a physically challenged or mentally retarded child.

Consequences of Late Payment

The penal provisions listed below pervade all the obligations to be met by the employer and the employee:

  • Delay in obtaining the Certificate of Registration – a penalty of Rs. 5 per day (for an employer) and Rs. 2 per day (for unemployed but earning individuals).
  • Delay in the payment of professional tax – a penalty of 2% per month. Non-payment of the same will force the assessee to remit 10% of the total tax due.
  • Delay in filing the returns – a penalty of Rs. 1000, which is applicable for up to a month of the delay. Returns not filed after this period will enhance the penal amount to Rs. 2,000.
  • Falsified or incorrect information – a penalty that is thrice the liability of professional tax.

Post by Sreeram Viswanath

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