To Buy: 1800-258-5899 (9:30 AM to 6:30 PM)

|

customerservice@canarahsbclife.in

|

Locate Branch

Login
Search Button

What is Professional Tax, Slab Rates & Applicability?

What is Professional Tax, Slab Rates & Applicability?

What kind of professionals must apply for Professional Tax in India?
Share :

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 a deduction that 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. Before moving further let us see what professional tax is.

What is Professional Tax?

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.

What Kind of Professionals must Apply for Professional Tax in India?

Tax season is fast approaching and everyone, especially first time taxpayers, are preparing themselves. For first time taxpayers, there is a lot to learn and figure out, and it might even get overwhelming at times. The taxes you pay depend mainly on your occupational status, and the amount of money you have earned in the year. Today, we have a look at professional tax, which is actually not just for professionals.

Statewise Professional Tax Slabs

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.

Professional Tax in West Bengal

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

Professional Tax in Maharashtra

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)

Professional Tax in Karnataka

Salary per month Tax
Up to Rs.14,999 NA
15,000+ Rs. 200

Professional Tax in Andhra Pradesh

Salary per month Tax
Up to Rs.15,000 NA
Rs.15,001 to Rs.20,000 Rs. 150
Rs.20,000+ Rs. 200

Professional Tax in Tamil Nadu

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

Professional Tax in Telangana

Salary per month Tax
Up to Rs. 15,000 NA
Rs. 15,000 to Rs. 20,000 Rs. 150
Rs. 20000+ Rs. 200

Professional Tax in Kerala

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

Applicability of Professional Tax

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.

1. Companies and Business Firms

2. Limited Liability Partnerships (LLP)

3. Corporations

4. Co-op Societies and Associations

5. Hindu Undivided Family

6. Clubs

7. Lawyers and Legal practitioners

8. Contractors

9. Architects

10. Engineers

11. Insurance agents

12. Chartered Accountants (CA)

13. Company Secretary (CS)

14. Surveyors

15. Tax consultants

16. Management consultants

17. Doctors and other medical representatives

How does Professional Tax Work?

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 for their revenue. Professional tax in India is collected by the Commercial Tax Department of the respective state.

Who is Responsible to Collect and Pay Professional Tax?

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.

What is the Maximum Limit for Professional Tax in India?

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.

How to Pay Professional Tax?

Professional Tax is a direct tax that is not levied by the central government. It is a state-levied tax. Thus, the payment also differs with different states.

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/

Exemptions in Professional Tax

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.

a) Member of Force (Governed by Army, Air Force, Navy Act)

b) An individual suffering from mental or physical disability. Disability can be blindness, deafness, etc.

c) Parent of a child suffering from a disability

d) Charitable hospitals are present in places that come under below taluk level.

e) Badli workers (temporary workers that are employed in a factory)

f) Individual running an educational institute

g) A foreign individual who has been employed by the relevant state

h) Any individual of above 65 years

i) Women who are solely engaged as agents under the Government’s Mahila Pradhan Kshetriya Bachat Yojana

Professional Tax Deduction

Yes, there is deduction available of professional tax paid under Section 16 of Income Tax Act, 1961

Consequences of Violation of Professional Tax Regulation

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.

FAQs on Professional Tax

1. Is there any professional tax for Union Territory also?

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.

2. Is it compulsory to pay professional 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

3. Is professional Tax applicable for freelancers?

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.

4. How to fill the Professional Tax Application form?

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.

http://pt.kar.nic.in

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.

×

Get a Call Back

Do you want us to call back Please fill the form below

Get a Call Back

Annual Income (In Lacs)

Call BackCall Back Pay PremiumPay Premium