Professional Tax is a Tax which is levied by the State on the Income earned by way of profession, trade, calling or employment. This form of tax was first levied in India in the year 1949 and the power to levy Professional Tax has been given to the States by way of Clause (2) of Article 276 of the Constitution of India.
This Tax is levied based on slab rates depending on the Income of the Individual. This Tax is just like Income Tax except for the fact that Income Tax is collected by the Central Govt and Professional Tax is collected by the State Government. When this tax was first introduced in India, the maximum limit on the tax to be collected was Rs. 250. However, this limit was raised from Rs. 250 to Rs. 2500 in the year 1988.
For the past few years, State Governments have been requesting the Parliament to raise this ceiling from Rs. 2500 to Rs. 7500. However, their request has not been accepted and the maximum amount of Professional Tax that can be levied by any State is Rs. 2,500 only.
Any amount paid as Professional Tax to the State Govt. is allowed as a deduction under Section 16 of the Income Tax Act and Income Tax on the Balance Amount is levied as per the Income Tax Slab Rates in force.
In case of Salaried and Wage earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.
Professional Tax in India is collected by some state governments themselves while in several other states which have active Panchayats, the local bodies themselves levy and this tax. Every person liable to pay this Tax (either on his own behalf or on behalf of its employee) shall apply for Professional Tax Registration in the prescribed form with the prescribed authority.
As the states have been empowered to levy and collect this Tax, different states levy Professional Tax as per Different Slab Rates. The Professional Tax Slab Rates in some of the major states in India are given below:-
1. Professional Tax in Maharashtra
Professional Tax in Maharashtra is governed by the Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975 which came into effect from 1st April 1975. The Professional Tax Slab Rates on Salary and Wages in Maharashtra are as follows:-
|Monthly Salary||Amount payable in Maharashtra|
|Less than Rs. 7500||Nil|
|Rs. 7501 to Rs. 10000||Rs. 175 pm|
|Rs. 10001 & above||Rs. 200 pm except for the month of Feb|
Rs. 300 for the month of Feb
Different Slab Rates have been prescribed for different class of Individuals by the Maharashtra State Govt. and the above slab rates are only for Salaried Individuals and Wage Earners.
For all other class of Individuals, Maharashtra State Govt has prescribed different slab rates and the Individual is himself liable to pay this Tax. For a detailed list of Slab Rate in Maharashtra on different class of Individuals refer this list.
The Maharashtra State Govt has also announced a composition scheme under which any person liable to make payment to the Maharashtra State Govt @ Rs. 2500 p.a. can make a onetime lump-sum payment in advance of Rs. 10,000 and his liability for the next 5 years would be discharged.
The Interest levied for late payment of this Tax in Maharashtra is 1.25% per month and the Maharashtra State Authority may also impose penalty @ 10% of the Total Tax due. Forms for Registration and Payment of Professional Tax can be downloaded from here.
2. Professional Tax in New Delhi
In December 2004, the Municipal Corporation of Delhi (MCD) tried to enforce professional tax on those residing and working in New Delhi. However, this proposal was rejected by the Standing Committee of the MCD. And therefore, this Tax is not levied in New Delhi.
3. Professional Tax in Karnataka
Professional Tax in Karnataka is levied under the Karnataka Tax on Professions, Trade, Callings and Employment Act, 1976. Professional Tax Slab Rates in Karnataka on Salary and Wage earners are as follows:-
|Monthly Salary||Amount payable in Karnataka|
|Less than Rs. 15,000||Nil|
|Rs. 15,000 & above||Rs. 200 per month|
Different Slab Rates in Karnataka have been prescribed for different class of Individuals and the above slab rates are only for Salary/ Wage earners. For detailed list on the slab rates of different class of Individuals in Karnataka refer this list.
For late payment of Professional Tax in Karnataka, Interest @ 1.25% per month would be levied and a maximum penalty of 50% of the Total Amount due may also be levied by the Karnataka authority. The Forms for Registration and for payment of this tax can be downloaded from here.
4. Professional Tax in West Bengal
Professional Tax in West Bengal is governed by the West Bengal State Tax on Professions, Trades, Callings and Employment Act, 1979. The Professional Tax Slab Rates in West Bengal with effect from 01/04/2013 on Salary & Wage earners are as follows:-
|Monthly Salary||Amount payable in West Bengal|
|Less than Rs. 8500||NIL|
|Rs. 8501 to Rs. 10000||Rs. 90 pm|
|Rs. 10001 to Rs. 15000||Rs. 110 pm|
|Rs. 15001 to Rs. 25000||Rs. 130 pm|
|Rs. 25001 to Rs. 40000||Rs. 150 pm|
|Rs. 40001 & above||Rs. 200 pm|
The above slab rates in West Bengal are only applicable to Salaried and Wage earners. For slab rates in West Bengal on other class of Individuals, refer this list.
The Forms for Registration and Payment of this tax in West Bengal can be downloaded from here. In case of any delay in depositing this Tax with the West Bengal Govt, Interest @ 1% pm would be levied. The West Bengal govt may also levy penalty @50% of the Total Amount Due.
5. Professional Tax in Madhya Pradesh
Professional Tax in Madhya Pradesh (MP) is levied by the Madhya Pradesh Vritti Kar Adhiniyam, 1995. As per Notification No. 174 dated 31/03/2012 published in the MP Gazette, the following Slab Rates would be applicable in Madhya Pradesh on salaried income wef 1st April 2012 onwards
|Monthly Salary||Amount payable in Madhya Pradesh|
|Less than Rs. 12500||Nil|
|Rs. 12500 to Rs. 14999||Rs. 125 pm|
|Rs. 15000 & above||Rs. 208 from April to Feb & Rs. 212 in March|
For slab rates on other class of individuals, refer this list.
6. Professional Tax in Tamil Nadu
Professional Tax in Tamil Nadu is levied under the Town Panchayats, Municipalities & Municipal Corporations Rules 1988. The Slab Rates in Tamil Nadu on salaried income are as follows:-
|Monthly Salary||Amount payable in Tamil Nadu|
|Less than Rs. 3500||Nil|
|Rs. 3501 to Rs. 5000||Rs. 16.66 pm|
|Rs. 5001 to Rs. 9000||Rs. 40|
|Rs. 9001 to Rs. 12500||Rs. 126.67 pm|
|Rs. 12501 & above|
Rs. 182.50 pm
7. Professional Tax in Andhra Pradesh
Professional Tax in Andhra Pradesh is levied under the Andhra Pradesh Tax on Professions, Trades, Callings and Employment Act 1987. The Slab Rates in Andhra Pradesh on Salary/ Wage earners are as follows:-
|Monthly Salary||Amount payable in Andhra Pradesh|
|Up to Rs. 15000||Nil|
|Rs. 15001 to Rs. 20000||Rs. 150 pm|
|Rs. 20,000 & above||Rs. 200 pm|
8. Professional Tax in Gujarat
Professional Tax in Gujarat is governed by the Gujarat Panchayats, Municipalities, Municipal Corporations and State Tax on Professions, Traders, Callings and Employment Act 1976. The Slab Rates in Gujarat are as follows:-
|Monthly Salary||Amount payable in Gujarat|
|Less than Rs. 5999||Nil|
|Rs. 6000 to Rs. 8999||Rs. 80 per month|
|Rs. 9000 to Rs. 11999||Rs. 150 per month|
|Rs. 12000 & above||Rs. 200 per month|
The above professional tax slab rates are salary/ wage earners. For other class of Individuals refer this list. The Forms for Professional Tax Registration and Payment of this Tax in Gujarat can be downloaded from here.
In case of any changes in the above stated Professional Tax Rates, please mail us the changes to [email protected]