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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 & Nicobar Arunachal Pradesh
Chandigarh Chhattisgarh
Dadra & Nagar Haveli Daman & Diu
Delhi Haryana
Himachal Pradesh Jammu & Kashmir
Lakshadweep Nagaland
Punjab Rajasthan
Uttaranchal Uttar 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 salary Tax (Per Month)
Upto 15000 Nil
15001 to 20000 150
Above 20,000 200

 

2) Assam

Monthly salary Tax (Per Month)
Upto 10000 Nil
10000 to 15000 150
15001 to 24999 180
25000 and above 208

 

3) Bihar

Monthly salary Tax (Per Month)
Upto 25000 Nil
25001 to 41666 83.33
41667 to 83333 166.67
83334 and above 208.33

 

4) Goa

Monthly salary Tax (Per Month)
Upto 15000 Nil
15001 to 25000 150
25001 and above 200

 

5) Gujarat

Monthly salary Tax (Per Month)
Upto 6000 Nil
6000 to 9000 80
9000 to 12000 150
12000 and above 200

 

6) Jharkhand

Monthly salary Tax (Per Month)
Upto 25000 Nil
25001 to 41666 100
41667 to 66666 150
66667 to 83333 175
83334 and above 208 (212 in February)

 

7) Karnataka

Monthly salary Tax (Per Month)
Up to 15,000 NIL
More than 15,000 200

 

8) Kerala

Monthly salary Tax (Half Yearly)
Upto 1999 Nil
2000 to 2999 120
3000 to 4999 180
5000 to 7499 300
7500 to 12499 600
12500 to 16666 750
16667 to 20833 1000
20834 and above 1250

 

9) Madhya Pradesh

Annual salary Tax (Per Month)
Upto 1.5 Lakhs Nil
1.5 lakhs to 1.8 lakhs 125
1.8 Lakhs and above 208 (212 for February)

 

10) Maharashtra

Monthly salary Tax (Per Month)
Upto 7500 for Men NIL
Upto 10000 for Women NIL
7500 to 10000 175
10000 and above 200 (February-300)

 

11) Meghalaya

Annual salary Tax (Annual)
Upto 50000 Nil
50001 to 75000 200
75001 to 100000 300
100001 to 150000 500
150001 to 200000 750
200001 to 250000 1000
250001 to 300000 1250
300001 to 350000 1500
350001 to 400000 1800
400001 to 450000 2100
450001 to 500000 2400
500001 and above 2500

 

12) Orissa

Monthly salary Tax (Per Month)
Upto 5000 Nil
5001 to 6000 30
6001 to 8000 50
8001 to 10000 75
10001 to 15000 100
15001 to 20000 150
Above 20000 200

 

13) Sikkim

Monthly salary Tax (Per Month)
Upto 20000 Nil
15001 to 30000 125
30001 to 40000 150
40001 and more 200

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

 

14) Tamil Nadu

Half Yearly salary Tax ( Per 6 Month)
Upto 21000 Nil
21001 to 30000 100
30001 to 45000 235
40001 to 60000 510
60001 to 75000 760
75001 and above 1095

 

15) Telangana

Monthly salary Tax (Per Month)
Upto 15000 Nil
15001 to 20000 150
20001 and above 200

 

16) Tripura

Monthly salary Tax (Half Yearly)
Upto 5000 Nil
5001 to 7000 420
7001 to 9000 720
9001 to 12000 840
12000 to 15000 1140
15001 and above 1248

 

17) West Bengal

Monthly salary Tax (Per Month)
Upto 8500 Nil
8501 to 10000 90
10001 to 15000 110
15001 to 25000 130
25001 to 40000 150
More than 40000 200

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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