How is professional Tax calculated?

In India, Professional Tax is calculated on Salary slabs. Under minimum salary, there is no tax. The maximum amount paid as Professional Tax is Rs.2500 per year. The tax slabs differ from state to state.

How much Professional Tax is deducted from my salary?

Professional Tax appears at the top of the salary slip as it is deducted even before calculating income-tax. The employer deducts it from the salary of the employee and deposits it with the State Government.

Is it mandatory to pay Professional Tax?

Professional Tax is a mandatory tax paid by every individual, and there are penalties in case of non-compliance.

Why is Professional Tax Different in every state?

The Professional Tax Rules vary from state to state. As the rules vary from state to state, each state can set limits and rates. But the maximum amount limit has been developed to Rs.2500 per year. The salary slab structures for levying Professional Tax differ from state to state.

What is a professional tax and when is it levied?

The professional tax is a state-level tax that is imposed on the income that is earned through profession, trade, calling, or employment. The tax is based on the slab that is dependent on the income o the individual who may be self-employed or working as an employee of an entity.

Is professional tax imposed in each state in India?

Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Orissa, Tripura, Madhya Pradesh, and Sikkim.

Who deducts the tax and deposits the same with the government?

In the case of self-employed individuals, the tax has to be paid by the individual himself. In the case of the individuals, the liability of deducting the tax is on the employer.

Who has to pay professional tax in India?

Every person that is engaged actively or otherwise in any profession, trades, callings, or employment and falls under one or the other class that is mentioned in the second column of the Schedule I appended to the profession tax act, is liable to pay the professional tax.

What is the time limit for obtaining the professional tax registration certificate?

An employer who is obtaining the registration certificate has to apply for the same within thirty days of becoming liable to pay the tax.

Who is assessed under the professional tax act?

The employer is liable to pay the professional tax that is assessed under the profession tax act.

Professional Tax

What is professional tax?

Professional Tax is a tax that is levied by the state government, it is levied on the income that is earned by the trade and is remitted by the employer. A person has to pay a professional tax of around Rs.2500 every year to the state or any local authority by the way of the tax on the profession, trades, callings, and the employments.

Professional tax in India is not just levied on the professionals but it is levied on all employees, a person carrying business, freelancers and professionals, etc and it is subject to the income exceeding the monetary threshold if there is any.

Professional tax is a kind of tax that is levied by the state government. The state government is also empowered to make laws with to the professional tax though being a tax on income under Article 276 of the constitution of India which deals with the taxes on profession, trades and callings, and employment. It may be noted that the professional tax is a deductible amount and can be deducted from the taxable income.

Professional tax is just like income tax, but the central government and the professional tax collect the income tax managed by the state government. At the time of the introduction, the maximum limit on the tax to be collected as the professional tax was Rs. 250. There has been an upward revision of the professional tax to Rs. 2500 and has allowed the government to raise the additional resources.