Professional Tax in India
Professional Tax is a state level tax levied by State Governments. It is applied to individuals, who is earning by way of salary income or practising a profession such as CA, CS, lawyer, doctor, architect, engineer etc.
Currently, this tax is applicable in Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Orissa, Sikkim, Tamil Nadu, Telangana, Tripura & West Bengal. The amount of professional tax differ from one state to another but it has an upper limit of Rs. 2500 per annum per individual.
Who is Responsible to deduct/pay Professional Tax
In case of salaried Individuals, the professional tax is liable to be deducted by the employer from the salary and to deposit the same to the state government. In case of practising professionals, the tax is liable to be deposited by the person himself. Professional tax is required to be deducted and deposited to the state government on regular basis (generally monthly or quarterly) depending on the state laws.
Note: – Professional tax deducted from the salary of employee is allowed as a deduction under section 16(iii) of Income Tax Act, 1961 at the time of computing income under the head salary. The limit of deduction is Rs 2,500 per annum.
How to register for professional tax
Apply for the Registration Certificate to your local state’s tax commercial department in the prescribed form.
The registration certificate has to be obtained within specified days of employing staff which is generally 30 days.
A separate application needs to be submitted if you have more than one places of business.
Foreign employees are not liable to pay professional tax in India.
Penalties for non- compliance
A penalty may be imposed by state government: –
if you delay in obtaining the Registration certificate
for a delay in making the payment
for a delay in filing return
States & Union Territories where Professional Tax is not applicableAndaman & NicobarArunachal PradeshChandigarhChhattisgarhDadra & Nagar HaveliDaman & DiuDelhiHaryanaHimachal PradeshJammu & KashmirLakshadweepNagalandPunjabRajasthanUttaranchalUttar Pradesh
Professional Tax Slabs in the Various States
Since different states levy professional tax as per different slab rates. The professional tax slab rates for all the states in India are given below.
1) Andhra PradeshMonthly salaryTax (Per Month)Upto 15000Nil15001 to 20000150Above 20,000200
2) AssamMonthly salaryTax (Per Month)Upto 10000Nil10000 to 1500015015001 to 2499918025000 and above208
3) BiharMonthly salaryTax (Per Month)Upto 25000Nil25001 to 4166683.3341667 to 83333166.6783334 and above208.33
4) GoaMonthly salaryTax (Per Month)Upto 15000Nil15001 to 2500015025001 and above200
5) GujaratMonthly salaryTax (Per Month)Upto 6000Nil6000 to 9000809000 to 1200015012000 and above200
6) JharkhandMonthly salaryTax (Per Month)Upto 25000Nil25001 to 4166610041667 to 6666615066667 to 8333317583334 and above208 (212 in February)
7) KarnatakaMonthly salaryTax (Per Month)Up to 15,000NILMore than 15,000200
8) KeralaMonthly salaryTax (Half Yearly)Upto 1999Nil2000 to 29991203000 to 49991805000 to 74993007500 to 1249960012500 to 1666675016667 to 20833100020834 and above1250
9) Madhya PradeshAnnual salaryTax (Per Month)Upto 1.5 LakhsNil1.5 lakhs to 1.8 lakhs1251.8 Lakhs and above208 (212 for February)
10) MaharashtraMonthly salaryTax (Per Month)Upto 7500 for MenNILUpto 10000 for WomenNIL7500 to 1000017510000 and above200 (February-300)
11) MeghalayaAnnual salaryTax (Annual)Upto 50000Nil50001 to 7500020075001 to 100000300100001 to 150000500150001 to 200000750200001 to 2500001000250001 to 3000001250300001 to 3500001500350001 to 4000001800400001 to 4500002100450001 to 5000002400500001 and above2500
12) OrissaMonthly salaryTax (Per Month)Upto 5000Nil5001 to 6000306001 to 8000508001 to 100007510001 to 1500010015001 to 20000150Above 20000200
13) SikkimMonthly salaryTax (Per Month)Upto 20000Nil15001 to 3000012530001 to 4000015040001 and more200
Note :- Different rates are also announced for various professional and business.
14) Tamil NaduHalf Yearly salaryTax ( Per 6 Month)Upto 21000Nil21001 to 3000010030001 to 4500023540001 to 6000051060001 to 7500076075001 and above1095
15) TelanganaMonthly salaryTax (Per Month)Upto 15000Nil15001 to 2000015020001 and above200
16) TripuraMonthly salaryTax (Half Yearly)Upto 5000Nil5001 to 70004207001 to 90007209001 to 1200084012000 to 15000114015001 and above1248
17) West BengalMonthly salaryTax (Per Month)Upto 8500Nil8501 to 100009010001 to 1500011015001 to 2500013025001 to 40000150More than 40000200