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How Much Is The Professional Tax In India?

Karan Sharma Karan Sharma 23 March 2020

Employees, self-employed individuals and companies are levied professional tax on their income by the state governments. Read this article to find out how much is the professional tax applicable in different states across India.

Professional Tax

If you have a look at your salary slip, you will find that there is a deduction made every month toward Professional Tax. Unlike its name would suggest, professional tax is not just levied on professionals. Rather, it is a tax on all kinds of professions, employment and trades, and charged on the income. Salaried individuals and anyone practicing a profession, like lawyer, chartered accountant, company secretary, etc. are required to pay this tax.

Professional tax is imposed by the state government via Article 276 of the Constitution of India, and differs from state to state. Each state has its own rules and regulations to govern professional tax of that particular state. All of them, however, do follow a slab system and deduct the tax on the basis of these slabs. The maximum amount that can be levied under 'Professional Tax' annually is Rs. 2,500.

Professional Tax in Various States:

Following are the professional tax slabs applicable in various states across India:

Maharashtra

  • Per Month Income Up to Rs. 7,500 - Professional Tax (per month) Nil
  • Per Month Income Rs. 7,501 to Rs. 10,000 - Professional Tax (per month) Rs.175
  • Per Month Income Rs. 10,001 and above - Professional Tax (per month) Rs. 200 and Rs. 300

Karnataka

  • Per Month Income Less than Rs.15,000 - Professional Tax Nil
  • Per Month Income Rs.15,000 and above - Professional Tax Rs. 200

Madhya Pradesh

  • Per Month Income Up to Rs.18,750 - Professional Tax Nil
  • Per Month Income Rs.18,751 to Rs. 25,000 - Professional Tax Rs. 125
  • Per Month Income Rs. 25,001 to Rs.33,333 - Professional Tax Rs. 167
  • Per Month Income Rs. 33,334 and above - Professional Tax Rs. 208 and Rs. 212

Assam

  • Per Month Income Up to Rs. 10,000 - Professional Tax (per month) Nil
  • Per Month Income Rs. 10,001 to Rs. 15,000 - Professional Tax (per month) Rs. 150
  • Per Month Income Rs. 15,001 to Rs. 25,000 - Professional Tax (per month) Rs. 180
  • Per Month Income Rs. 25,001 and above - Professional Tax (per month) Rs. 208

Sikkim

  • Per Month Income Up to Rs. 20,000 - Professional Tax (per month) Nil
  • Per Month Income Rs. 20,001 to Rs. 30,000 - Professional Tax (per month) Rs. 125
  • Per Month Income Rs. 30,001 to Rs. 40,000 - Professional Tax (per month) Rs. 150
  • Per Month Income Rs. 40,001 and above - Professional Tax (per month) Rs. 200

West Bengal

  • Per Month Income Up to Rs. 10,000 - Professional Tax (per month) Nil
  • Per Month Income Rs. 10,001 to Rs. 15,000 - Professional Tax (per month) Rs. 110
  • Per Month Income Rs. 15,001 to Rs. 25,000 - Professional Tax (per month) Rs. 130
  • Per Month Income Rs. 25,001 to Rs. 40,000 - Professional Tax (per month) Rs. 150
  • Per Month Income. 40,001 and above - Professional Tax (per month) Rs. 200

Who Collects and Pays Professional Tax?

Professional tax is collected by the Commercial Tax Department of the state governments. This ultimately reaches the fund of municipality corporation.

In case of salaried individuals, the employers are tasked with the responsibility of deducting and paying professional tax to the government. Self-employed individuals or those who don’t work under an employer are liable to pay professional tax themselves. Such entities can register for professional tax by applying through a form. A registration number will be issued following successful registration. The tax can be paid using this registration number at banks.

Penalty for Late Payment

Delay in obtaining the registration certificate - The employer will be charged a penalty of Rs. 5 per day and a non-employed individual will be charged Rs. 2 per day.

Delay in filing the returns - If the returns are filed within a month after the due date, a penalty of Rs. 1,000 shall be charged. In case the return is not filed even after one month post the due date, the penalty charged shall be Rs. 2,000.

Delay in payment of professional tax - A penalty of 2% per month of the tax amount shall be levied. In case of non-payment of professional tax, the assessee would have to incur an additional penalty of 10% of the tax due amount.

Conclusion

The rate of professional tax varies from one state to another, and it is vital for salaried and self-employed individuals to be aware of the prevailing rates. In case of any doubts or clarifications, users are advised to seek help from a tax consultant or chartered accountant, who will provide guidance on tax payment and help in the prevention of any loss.

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Karan Sharma
Written by Karan Sharma
Content Specialist and Strategist, foolishly creative and always ready for a game of 'Call of Duty'.