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Professional Tax
P Tax in India
- Professional tax is a tax on income charged by the State Government.
- The maximum limit of professional tax which can be levied on a person in a financial year is ₹ 2,500.
- Not all States and Union Territories charge P Tax, like; Haryana, Delhi, Uttar Pradesh, Rajasthan, etc.
- The slab of Professional Tax is different for each State which charges the tax.
- There are penalties imposed for late payment of tax, late filing of return and non-registration under the professional tax.
- For employees, the professional tax is deducted and submitted by the employer.
- An employer, whether company/partnership/sole proprietor is required to get a Professional Tax Registration Certificate as well as the Professional Tax Enrollment Certificate.
What is Professional Tax?
The tax on income levied by the state government on individuals is called Professional tax. Whether you are a professional, employee or trader, all are required to pay professional tax as per the specified threshold by the state government. In India, not all states levy professional tax and the tax slab or limits also varies with each state.
Although as per Article 246 of the Indian Constitution, the taxes on income can be levied or make laws in its respect comes only within the power of Parliament. However, professional tax is one such tax on income which is collected by the state government. The State Government can also make laws regarding professional tax. The maximum limit for professional tax has been set at ₹ 2,500 per year for an individual. While calculating income tax, the professional tax shall be deducted from the total taxable income.
Professional Tax Slab Rates
The professional tax slab in each state that levy this tax is different. Some states and union territories do not charge this tax. In states where professional tax is charged, it is due for payment in 12 equal monthly instalments. Article 276 of the Indian Constitution which provides State Governments with the power to charge professional tax has also put a maximum ceiling of ₹ 2,500 for any individual.
Each state has its own slab for charging professional tax. Following is the slab in some of the states, where P tax is applicable:
Professional Tax Slab for Karnataka| Monthly Income (₹) | Tax Per Month (₹) |
| Upto ₹ 15,000 | NIL |
| More than ₹ 15,000 | ₹ 200 |
| Monthly Income (₹) | Tax Per Month (₹) |
| Upto ₹ 15,000 | NIL |
| From ₹ 15,001 to ₹ 20,000 | ₹ 150 |
| Above ₹ 20,000 | ₹ 200 |
| Monthly Income (₹) | Tax Per Month (₹) |
| Upto ₹ 1.50 Lakh | NIL |
| From ₹ 1.50 Lakh to ₹ 1.80 Lakh | ₹ 125 |
| Above ₹ 1.80 Lakh | ₹ 212 |
| Monthly Income (₹) | Tax Per Month (₹) |
| Upto ₹ 5,999 | NIL |
| From ₹ 6,000 to ₹ 8,999 | ₹ 80 |
| From ₹ 9,000 to ₹ 11,999 | ₹ 150 |
| ₹ 12,000 and above | ₹ 200 |
| Monthly Income (₹) | Tax Per Month (₹) |
| For Men Upto ₹ 7,500 | NIL |
| For Women Upto ₹ 10,000 | NIL |
| For Men From ₹ 7,501 to ₹ 10,000 | ₹ 175 |
| Above ₹ 10,000 | ₹ 200 (In February - ₹ 300) |
| Monthly Income (₹) | Tax Per Month (₹) |
| Upto ₹ 8,500 | NIL |
| From ₹ 8,501 to ₹ 10,000 | ₹ 90 |
| From ₹ 10,001 to ₹ 15,000 | ₹ 110 |
| From ₹ 15,001 to ₹ 25,000 | ₹ 130 |
| From ₹ 25,001 to ₹ 40,000 | ₹ 150 |
| Above ₹ 40,000 | ₹ 200 |
| Monthly Income (₹) | Tax Per Month (₹) |
| Upto ₹ 5,000 | NIL |
| From ₹ 5,001 to ₹ 6,000 | ₹ 30 |
| From ₹ 6,001 to ₹ 8,000 | ₹ 50 |
| From ₹ 8,001 to ₹ 10,000 | ₹ 75 |
| From ₹ 10,001 to ₹ 15,000 | ₹ 100 |
| From ₹ 15,001 to ₹ 20,000 | ₹ 150 |
| Above ₹ 20,000 | ₹ 200 |
How to pay Professional Tax?
Professional tax can be paid online on the professional tax website of the respective state. Professional tax needs to be paid by the last day of the month. E-filing is mandatory in case you are paying tax monthly. The necessary steps to make the payment for professional tax for each state is more or less similar.
Who is responsible for collecting and paying professional tax?
The collection of Professional tax is done by the Commercial Tax Department of a state. The tax collected is transferred to the funds of the municipal corporation.
When it comes to payment of professional tax, then for employees the tax is deducted and paid by the employer. However, employers, whether being a company, partnership firm or sole proprietor, is also carrying on a profession/trade. Therefore they are also required to pay professional tax as per the threshold specified by the state government. Since employers deduct and pay tax, they are also required to get both a professional tax registration certificate as well as professional tax enrolment certificate.
Freelancers are also required to get themselves registered as per the monetary threshold specified by the state government. However, various state governments have also defined scenarios in which case the professional tax is exempted. For example, professional tax is exempt for guardians or parents of blind people.
Consequences of violation of professional tax regulation
The penalty or late fee or interest for late payment of professional tax varies with each State. Besides, penalties can also be levied for non-registration. Along with penalty for late payment, there is also a penalty for late filing of return.
How to File a P Tax Return?
The procedure to file P tax returns for each state is more or less similar. Since the payment is being made every month, the return also needs to be submitted each month. Along with return, you also need to furnish the payment proof that the tax was submitted before the due date. For individuals, the professional tax has to be paid annually.
FAQs
✅What is a professional tax and how is it calculated?
Professional tax is the tax on income levied by the State Government on professionals, employees and traders. It is calculated based on the predetermined slab as specified by the respective state or union territory.
✅How do I get a professional tax certificate?
You can get the professional tax certificate by registering for it on the professional tax website of your respective state.
✅What is the rule of professional tax?
The maximum amount of professional tax that can be levied on a person in a financial year is limited to ₹ 2,500.
✅Why is professional tax deducted?
Employers deduct professional tax from the salary or wages of their employees and submit it with the required state authorities.
✅Who is liable for professional tax?
Any person earning income within the state in which professional tax is applicable needs to pay it to the state authorities and also get itself registered under the Professional Tax.
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