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All You Need To Know About Professional Tax in India
Posted on: 2017-05-04 03:10:54
If you look at your pay slip you will see that there is a small amount that has been deducted along with all the basic breakups in your salary, house rent allowance, travel, and other areas. Normally, the amount deducted in this case is in the region of INR 200 for Karnataka and is referred to as professional tax.
This tax is not the same in each and every state in India. Means it differs from state to state. In certain States and Union Territories, you would see that no money is deducted as professional tax. Means till now, they haven't imposed it and don't want to entail into their region. This is why you may want to know what professional tax is.
What is professional tax and who imposes it?
Professional tax is a tax levied on monthly gross salary of one’s income. This is a statewide tax, applicable to the person’s or professional’s income. If he/she meets the certain monthly income range then the person or professional has liable to pay it.
The state has the power to imply this tax to the people those who are working inside the region of state and territory. Remember this tax is not implied by the nation. It's state's own tax structure.
Who has to collect and pay professional tax?
Professional tax is normally collected by the state and is applicable for all individual professionals who are earning in the state. And this tax would be deducted from employee salary account by the employer and submitted to state Govt. tax department.
Who all are taxed for PT?
Professional tax (PT) registration is an important part of state taxes. The purpose of this tax it is to collect from the professionals through employer and use it in developmental work. It is important that you do not get confuse the word "professional" they might be the people such as doctors, engineers, chartered accountants, company secretaries, etc. and others.
This tax needs to be paid by every person who earns a certain amount montly as per the state rule. Normally, the upper limit for these taxes is around INR 2500 per year. This is constant in spite of the fact that the rates vary from one state to another.
Differences and reasons on professional tax
One of the major reasons for the variation in this tax is the fact that the state governments charge this tax and as such there are always going to be differences. Each and every state that levies this tax declares a slab and the rate of tax is collected based on the below said slabs.
In some states and union territories the tax does not exist at all. It is normally computed by dividing the yearly professional tax into 12 equal installments. Normally you pay the most in February since it has the least number of days in a year.
Source of income for individual or organization
In certain states the source of your income could itself make you liable to be subjected to other taxes. In some states for example if you are running a transport business you have to pay a professional tax of INR 50 per year. The maximum limit in this case is INR 1000.
Professional tax is normally collected by your employers and is deducted from the salary they pay you every month. Having collected them the employers are supposed to deposit it with the government. If they fail to do this – for whatever reason it may be – they can be subjected to penalties.
If you are working as a solopreneur or freelancer for yourself then it is your responsibility to pay the said tax by yourself. You can easily register yourself and apply for professional tax registration online. This application can be done by way of a form.
Once the government gets the form it will issue a registration number for you. With the help of these registration numbers you can pay professional tax in the banks as well. You can try and find out if there are any benefits related to paying these taxes and avail them.
PT slabs rate levied by major states
The following are the various professional tax slab rates in India for most growing cities of different states.
Professional tax rate in Mumbai, Maharashtra
Monthly Salary
Monthly Payable Professional Tax
Up to Rs. 7,500 (For Male)
Nil
Up to Rs. 10,000 (For Female)
Nil
Rs. 7,501 to Rs. 10,000 (For Male)
Rs. 175 per month
Above Rs. 10,000 (For both Male & Female)
Rs. 2,500 annually
Professional tax rate in Kolkata, West Bengal
Monthly Salary
Monthly Payable Professional Tax
Up to Rs. 10,000
Nil
Rs. 10, 001 to Rs. 15,000
Rs. 110
Rs. 15,001 to Rs. 25,000
Rs. 130
Rs. 25,001 to Rs. 40,000
Rs. 150
Above Rs. 40,000
Rs. 200
Professional tax rate in Bangalore, Karnataka
Monthly Salary
Monthly Payable Profession Tax
Up to Rs. 15,000
Nil
Above Rs. 15,000
Rs. 200
Professional tax rate in Hyderabad, Telangana
Monthly Salary
Monthly Payable Profession Tax
Up to Rs. 15,000
Nil
Rs. 15,001 to Rs. 20,000
Rs. 150
Above Rs. 20,000
Rs. 200
Professional tax rate in Andhra Pradesh
Monthly Gross Salary
Monthly Payable Profession Tax
Up to Rs. 15,000
Nil
Rs. 15,001 to Rs. 20,000
Rs. 150
Above Rs. 20,000
Rs. 200
Professional tax rate in Chennai, Tamil Nadu
Half Yearly Gross Income
Profession Tax Payable Half Yearly Basis
Up to Rs. 21,000
Nil
Rs. 21,001 to Rs. 30,000
Rs. 135
Rs. 30,001 to Rs. 45,000
Rs. 315
Rs. 45,001 to Rs. 60,000
Rs. 690
Rs. 60,001 to Rs. 75,000
Rs. 1,025
Above Rs. 75,000
Rs. 1,250
Professional tax slab rate in Ahmedabad, Gujarat
Monthly Salary/Wages
Monthly Payable Profession Tax
Up to Rs. 5,999
Nil
Rs. 6,000 to Rs. 8,999
Rs. 80
Rs. 9,000 to Rs. 11,999
Rs. 150
Rs. 12,000 or above
Rs. 200
States & Union Territories have not levied professional tax?
See the table below herein, list of states and union territories that are not charging tax on profession who are doing jobs in their cities or regions.
States Not Charges Profession Tax
Union Territories Not Charges Profession Tax
Arunachal Pradesh
Andaman and Nicobar Islands
Goa
Chandigarh
Himachal Pradesh
Daman and Diu
Haryana
Dadra and Nagar Haveli
Jammu and Kashmir
Delhi (National Capital Territory)
Punjab
Lakshadweep
Rajasthan
Uttar Pradesh
Uttarakhand
Is professional tax mandatory?
Yes, professional tax is compulsory for professionals. If a person is earning an income from his/her profession and meets the monthly taxable income range then he/she has to pay it.
Is professional tax applicable for contract employee?
Professional tax is not applicable for contract employee, because they don’t have employer and employee relationship. But TDS can be applicable to them, if they come under that area.
What is the due date for payment of professional tax?
Due date for professional tax in India is payable on or before 20th of every consequent month that could be based on the state government’s tax rule. And annual statement has to file before 30th May of every financial year.
