Everything about Professional Tax and Its Deduction

If you are salaried personnel, take a closer look at your payslip, you'll learn that your employer deducts a small amount every month based on your income along with other regular deductions. This amount accounts for your professional tax, which your employer pays to the state government on your behalf. In this article, we will talk about everything that you need to know about 'Professional tax' and why is it deducted.

What is Professional Tax?

The Professional Tax is not a tax levied on the professionals only, this tax is levied on every individual who earns a livelihood through profession, employment, trade or calling.

How is Professional Tax deducted from the salary?

As per provisions mentioned in Clause (2), Article 276 of the Indian Constitution, the right to levy and collect professional tax is bestowed on the State Governments. However, no state can levy professional tax beyond Rs 2,500 on any taxpayer in a year.

What are the consequences of not paying Professional Tax?

There is different legislation in place to ensure compliance of Professional Tax. Usually, a penalty is imposed on a taxpayer for failing to register for Professional Tax. Penal provisions are also there for non-payment of professional tax and for failing to file the return within the due date.

Who is responsible to collect and pay professional tax?

Professional tax is collected by the Commercial Tax Department. The commercial tax department of the respective states collects it which ultimately reaches the fund of municipality corporation.

In which states is a professional tax not applicable?

The states and union territories where professional tax is not applicable are:

- New Delhi

- Arunachal Pradesh

- Chandigarh

- Chhattisgarh

- Dadra & Nagar Haveli

- Daman & Diu

- Haryana

- Lakshadweep

- Jammu & Kashmir

- Rajasthan

- Uttaranchal

- Uttar Pradesh

In which states is a professional tax applicable?

The states that impose professional tax are:

- Karnataka

- Bihar

- West Bengal

- Andhra Pradesh

- Maharashtra

- Tamil Nadu

- Gujarat

- Assam

- Kerala

- Meghalaya

- Odisha

- Tripura

- Madhya Pradesh

How can we help you?

The process of filing a Professional Tax is time-consuming. So, we at Online Legal India™ can help you and make this process simple and easy.

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