Professional tax is a tax that is imposed by state governments on all salaried individuals. Professional tax is applicable to all working professionals, such as chartered accountants, lawyers, and doctors.
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*errorProfessional Tax is a tax that is levied by the state government, it is levied on the income that is earned by the trade and is remitted by the employer. A person has to pay a professional tax of around Rs.2500 every year to the state or any local authority by way of the tax on the profession, trades, callings, and the employment.
Professional tax in India is not just levied on the professionals but it is levied on all employees, a person carrying business, freelancers and professionals, etc and it is subject to the income exceeding the monetary threshold if there is any.
Professional tax is a kind of tax that is levied by the state government. The state government is also empowered to make laws with the professional tax though being a tax on income under Article 276 of the constitution of India which deals with the taxes on profession, trades and callings, and employment. It may be noted that the professional tax is a deductible amount and can be deducted from the taxable income.
Professional tax is just like income tax, but the central government and the professional tax collect the income tax managed by the state government. At the time of the introduction, the maximum limit on the tax to be collected as the professional tax was Rs. 250. There has been an upward revision of the professional tax to Rs. 2500 and has allowed the government to raise the additional resources.
Here is the list of states where the professional tax is levied.
Here is the list of states where the professional tax is not applicable
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Who is liable to pay Profession Tax as ‘employer’?
Every employer is liable to deduct Profession Tax (as per the Schedule to the Profession Tax Act) from the salary/wages paid to his employees & to pay the Profession Tax so deducted.
What is the penal provision for non-payment of Profession Tax or not obtaining certificate of registration ?
If an employer fails to make payment of Profession Tax due from him; or
if an employer fails to apply for registration within 90 days of his becoming liable to pay tax; or
if a registered employer fails to file return, provision for imposition of penalty & even prosecution shall be applicable to him.
On which date an employer becomes liable to pay tax ?
The date of liability will be the date on which the employer disburses salary/wages to any of his employees in the taxable limit, for the first time.
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