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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 applicable

Andaman & NicobarArunachal Pradesh
ChandigarhChhattisgarh
Dadra & Nagar HaveliDaman & Diu
DelhiHaryana
Himachal PradeshJammu & Kashmir
LakshadweepNagaland
PunjabRajasthan
UttaranchalUttar 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 Pradesh

Monthly salaryTax (Per Month)
Upto 15000Nil
15001 to 20000150
Above 20,000200

 

2) Assam

Monthly salaryTax (Per Month)
Upto 10000Nil
10000 to 15000150
15001 to 24999180
25000 and above208

 

3) Bihar

Monthly salaryTax (Per Month)
Upto 25000Nil
25001 to 4166683.33
41667 to 83333166.67
83334 and above208.33

 

4) Goa

Monthly salaryTax (Per Month)
Upto 15000Nil
15001 to 25000150
25001 and above200

 

5) Gujarat

Monthly salaryTax (Per Month)
Upto 6000Nil
6000 to 900080
9000 to 12000150
12000 and above200

 

6) Jharkhand

Monthly salaryTax (Per Month)
Upto 25000Nil
25001 to 41666100
41667 to 66666150
66667 to 83333175
83334 and above208 (212 in February)

 

7) Karnataka

Monthly salaryTax (Per Month)
Up to 15,000NIL
More than 15,000200

 

8) Kerala

Monthly salaryTax (Half Yearly)
Upto 1999Nil
2000 to 2999120
3000 to 4999180
5000 to 7499300
7500 to 12499600
12500 to 16666750
16667 to 208331000
20834 and above1250

 

9) Madhya Pradesh

Annual salaryTax (Per Month)
Upto 1.5 LakhsNil
1.5 lakhs to 1.8 lakhs125
1.8 Lakhs and above208 (212 for February)

 

10) Maharashtra

Monthly salaryTax (Per Month)
Upto 7500 for MenNIL
Upto 10000 for WomenNIL
7500 to 10000175
10000 and above200 (February-300)

 

11) Meghalaya

Annual salaryTax (Annual)
Upto 50000Nil
50001 to 75000200
75001 to 100000300
100001 to 150000500
150001 to 200000750
200001 to 2500001000
250001 to 3000001250
300001 to 3500001500
350001 to 4000001800
400001 to 4500002100
450001 to 5000002400
500001 and above2500

 

12) Orissa

Monthly salaryTax (Per Month)
Upto 5000Nil
5001 to 600030
6001 to 800050
8001 to 1000075
10001 to 15000100
15001 to 20000150
Above 20000200

 

13) Sikkim

Monthly salaryTax (Per Month)
Upto 20000Nil
15001 to 30000125
30001 to 40000150
40001 and more200

Note :- Different rates are also announced for various professional and business.

 

14) Tamil Nadu

Half Yearly salaryTax ( Per 6 Month)
Upto 21000Nil
21001 to 30000100
30001 to 45000235
40001 to 60000510
60001 to 75000760
75001 and above1095

 

15) Telangana

Monthly salaryTax (Per Month)
Upto 15000Nil
15001 to 20000150
20001 and above200

 

16) Tripura

Monthly salaryTax (Half Yearly)
Upto 5000Nil
5001 to 7000420
7001 to 9000720
9001 to 12000840
12000 to 150001140
15001 and above1248

 

17) West Bengal

Monthly salaryTax (Per Month)
Upto 8500Nil
8501 to 1000090
10001 to 15000110
15001 to 25000130
25001 to 40000150
More than 40000200

About Rohit Pithisaria

Rohit Pithisaria is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He is actively writing from very beginning of his professional career and is author of various tax articles and blogs.

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