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Contact us
To Buy: 1800-258-5899 (9:30 AM to 6:30 PM)
For Existing Policy: 1800-103-0003/ 1800-180-0003/ 1800-891-0003
customerservice@canarahsbclife.in
If you are employed and earn a regular salary, you are required to pay professional tax. You must have seen the term professional tax in the salary slips that you receive every month. It is written below your gross salary, allowance, and HRA.
Professional tax is deducted from your gross salary along with TDS, EPF and any other deduction.
However, this tax doesn’t mean that it is levied only if you are in professional practice such as a doctor, lawyer etc. If you earn a salary, you are eligible to pay this tax. Let us discuss professional tax in detail.
Professional tax is a direct tax that is deducted from your gross salary by your employer.
This tax is levied by the state government and thus can vary depending on the state you live in. The maximum limit of which you can be charged is Rs 2500.
The tax is calculated based on the slabs. Each state can have different salary slab rates for the calculation of professional tax. Andhra Pradesh, Maharashtra, Gujarat are some of the states where this tax is applicable.
Professional slab rate varies from state to state. Some of the states which currently impose a professional tax in India are West Bengal, Maharashtra, Gujarat, Andhra Pradesh, Kerala, Tamil Nadu, Karnataka, Bihar, Assam, Madhya Pradesh etc.
| Salary per month | Tax |
| Up to Rs.10,000 | 0 |
| 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 |
| More than Rs.40,000 | Rs.200 |
| Salary per month | Tax |
| Till Rs.7,500 (men) | NA |
| Till Rs.10,000 (women) | NA |
| Rs.7,501 to Rs.10,000 | Rs. 175 |
| Rs.10,000+ | Rs. 200 (300 for the last month) |
| Salary per month | Tax |
| Up to Rs.14,999 | NA |
| 15,000+ | Rs. 200 |
| Salary per month | Tax |
| Up to Rs.15,000 | NA |
| Rs.15,001 to Rs.20,000 | Rs. 150 |
| Rs.20,000+ | Rs. 200 |
| Salary per month | Tax |
| Up to Rs.3,500 | NA |
| Rs.3,5001 to Rs.5,000 | Rs. 22.5 |
| Rs.5,001 to Rs.7,500 | Rs. 52.5 |
| Rs.7,501 to Rs.10,000 | Rs. 115 |
| Rs.10,001 to Rs.12,500 | Rs. 171 |
| Above Rs.12,500 | Rs. 208 |
| Salary per month | Tax |
| Up to Rs. 15,000 | NA |
| Rs. 15,000 to Rs. 20,000 | Rs. 150 |
| Rs. 20000+ | Rs. 200 |
| Salary per month | Tax |
| Up to Rs. 1999 | NA |
| Rs. 3,000 to Rs. 4,999 | Rs. 20 |
| Rs. 3,000 to Rs. 7,499 | Rs. 30 |
| Rs. 5,000 to Rs. 7,499 | Rs. 50 |
| Rs. 7,500 to Rs. 9,999 | Rs. 75 |
| Rs. 10,000 to Rs. 12,499 | Rs. 100 |
| Rs. 12,500 to Rs. 16,666 | Rs. 125 |
| Rs. 16,667 to Rs. 20,833 | Rs. 166 |
| Rs. 20,834+ | Rs. 208 |
Professional tax does not mean that only people who practice a profession need to pay it. It applies to other sections as well. Here is the list of the parties that are required to pay Professional tax.
Like every direct tax formula, Professional Tax in India has its formula and the slab rate is set by the individual state or union territory. According to Article 246 of the Constitution, only Parliament has power to frame laws for subjects on the Union List that includes tax on income.
However, in case of the State and Concurrent lists, the state can make it optional to levy professional tax in India. This tax is deductible from your taxable income. Thus most of the Indian states and union territories levy professional tax since it is a source of their revenue. Professional tax in India is collected by the Commercial Tax Department of the respective state.
For employees, their employer is responsible for deduction and payment of professional tax to their respective State Government as per the rate slab, and also for registering and obtaining professional tax registration certificates. Individuals involved in freelance occupations without employees also need to register for this tax, as per the slab provided by the state government.
Do keep in mind, professional tax is subject to exemptions provided by respective states to specific categories.
Although the tax is levied depending upon the income of the individual, the maximum amount any State can levy as Professional Tax is restricted to Rs. 2,500.
Professional Tax is a direct tax that is not levied by the central government. It is a state-levied tax. Thus, the mode of payment may also vary from State to State.
However, in general, professional tax can be paid via both online and offline modes. You need to visit the relevant state’s official website for payment of professional tax. For example, if you reside in West Bengal you need to log in to their official website: http://wbprofessiontax.gov.in/
Though every individual who receives a regular income (salary) is required to pay the Professional Tax, some individuals are exempt from it. So, if you fall under the categories mentioned below, you do not need to pay Professional Tax.
Yes, there is deduction available of professional tax paid under Section 16 of Income Tax Act, 1961
Each state has its own penalty rates for failure to register for professional tax in time and delay in filing the returns. There is also a penalty for missing the due date, which again depends on the state legislation.
For example: In Maharashtra, penalty for late registration is Rs 5/day. There is also an interest of 1.25%/month for late payment, a 10% penalty on the tax amount in the case of non-payment/delay of professional tax, and a penalty of Rs.1000 –2000 for late return-filing.
Professional Tax is a direct tax that, unlike Income Tax, is governed by states and not the central government. Since Union territories come under the control of the Central Government, these are not subject to pay the professional tax.
Thus, all the 9 union territories; Andaman and Nicobar Islands, Chandigarh, Dadra, and Nagar Haveli and Daman and Diu, Delhi, Jammu and Kashmir, Lakshadweep, Ladakh, and Puducherry do not need to pay.
Also, most of these are very small areas and contribute less to the economy so they are exempted from this tax.
Yes, professional tax is compulsory. You are required to pay if you are a salaried individual. That is you receive a regular salary for your work.
However, the amount that you will have to pay towards your professional tax will depend on the state you reside in. Each state has different slab rates regarding the tax rates. The amount can vary from 200-2500.
In the following cases, you are not required to pay the tax
- If your income is below the slab rate of the relevant state
- If you live in a state/UT where professional tax is not applicable
- If you come under the exemptions list
Yes, professional Tax is applicable for freelancers also. Thus, even if you are a freelancer and generate and your income is more than the minimum prescribed limit of the state you are in, then you will have to pay the professional tax.
You can fill the Professional Tax Application form by simply visiting the official website of Professional Tax i.e. The site’s link is given here for your help.
Here are the next steps you can follow:
- After clicking on the link, locate the ‘Enrolment Application’ section and click on the icon. A new page window will open.
- Here you will see two options ‘new’ and ‘enrolled’. If you are using the site for the first time click on the ‘new’ button.
- Enter the details asked. These can be the financial year, the professional tax office, the type of return, business status, etc.
You will then have to enter other necessary details as asked for. The final step will require you to make the payment which can be done via credit/debit card or by net banking. Once the payment is done, you will receive a receipt which you must download and keep for future reference.
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