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Professional Tax in Madhya Pradesh

Professional Tax in Madhya Pradesh

Professional Tax in Madhya Pradesh

Professional Tax is a tax that the State Government of Madhya Pradesh levies on individuals who earn income through any medium. It means individuals, whether professionals, traders, or employers, must pay professional Tax in Madhya Pradesh according to the income threshold set by the State Government. This article looks at the various aspects of professional Tax in Madhya Pradesh.

Law Governing the Professional Tax in Madhya Pradesh

Madhya Pradesh Professional Tax Act, 1995 (also referred to as Madhya Pradesh Vritti Kar Adhiniyam, 1995) is responsible for managing professional Tax in MP, and it extends to the whole State of Madhya Pradesh.

Click here to get the official notification of the Madhya Pradesh Professional Tax Act, 1995

Professional Tax Slab in Madhya Pradesh

Salary/ Income (Salary) Payable Amount (Monthly)
Up to ₹ 18,750 Nil
From ₹ 18,751 to ₹ 25,000 ₹ 125
From ₹ 25,001 to ₹ 33,333 ₹ 167
₹ 33,334 and above ₹ 208 for the 11 months and ₹ 212 for the last month

Note: Madhya Pradesh Government imposes ₹ 208 for the first 11 months of a financial year and ₹ 212 for the last month of the financial year, particularly for persons whose salary or income is above ₹ 15,000.

Applicability of Madhya Pradesh Professional Tax

The professional Tax must be remitted by individuals and business entities engaged in any profession, trade, callings, or employment — government and private.

  • Both salaried and self-employed individuals must pay professional Tax, which the Karnataka State Government collects.
  • For salaried employees, the professional Tax is levied by employers, whereas non-salaried professionals need to pay it to local authorities appointed to collect the Professional Tax.
  • Doctors, advocates, chartered accountants, and every other individual engaged in private professions is liable to pay professional Tax in Karnataka.

Who Is Responsible for Collecting and Paying Professional Tax in Madhya Pradesh?

The State Government of Madhya Pradesh collects P Tax within the State.

According to Article 276 of the Indian Constitution, Professional Tax is levied on professions, trades, callings, and employment. Therefore, individuals of Madhya Pradesh involved in any profession, calling or trade, or employment must pay professional Tax within the State. To be precise, persons responsible for delivering professional Tax can be broadly classified into two segments. They are,

  • Salaried individual
  • Self-employed individual

Due Date for Professional Tax Payment in Madhya Pradesh

After deducting professional Tax from employees, employers must submit the same within ten days of the end of the month against the deduction.

Alternatively, persons other than employees must pay P tax in Madhya Pradesh annually. The dates vary depending on the registration of professional Tax in MP. The dates are as follows,

  • If a person registers before the start of a financial year or on or before 31st August of a financial year, they have to pay P tax in MP before 30th September of that financial year.
  • If a person registers their business after 31st August of a financial year, they must pay P tax in MP within 30 days of registration.

If employers (on behalf of employees) or self-employed individuals fail to pay P tax within the stipulated date, they have to pay the penalty equal to 2% per month of the total due amount. The penalty amount can rise as high as two-thirds of the tax due.

Exemption From Paying Professional Tax 

The State of Madhya Pradesh frees specific individuals from paying professional Tax with the State. They are as follows,

  • Senior citizens above the age of 65 years
  • Parents or guardians of disabled/mentally disabled children
  • Individuals having a disability of 40% or more of permanent disability or blindness

As working or earning individuals know about slab rates and due dates of payment of professional Tax in MP, they can calculate the amount and pay the same within the stipulated date.

Documents Required

The documents essential for professional tax registration in Madhya Pradesh include the following:

  • Memorandum of Association
  • Articles Of Association
  • Lease agreement
  • Name and activities of the firm or organization
  • PAN card
  • Bank account details
  • Employer address proof
  • ID proof and photos
  • Employee list with salary details

Procedure to Pay MP Professional Tax  

Access the official website of the Department of Commercial Tax, Government of Madhya Pradesh. From the homepage, click on the PT registration option and then select the PT Employer Registration or PT Person registration option to complete the registration option.

Once the registration process is completed, the employer can pay the MP Professional tax online.

The taxpayer can obtain MP Professional Tax registration through IndiaFilings.

Professional Tax Return

Every employer registered under the Madhya Pradesh Professional Tax Act, 1995 shall furnish the Profession Tax Assessing Authority returns in a prescribed Form.

A treasury challan shall accompany every such return in proof of payment of a total amount of Tax due according to the return, and a return without such proof of payment shall not be deemed duly filed.

If an employer has, without reasonable cause, failed to file the such return within the prescribed time, the Profession Tax Assessing Authority may, after giving him a good opportunity of being heard, impose upon him a penalty not exceeding Rs.20 for each day of delay.