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May 21, 2018

Professional Tax in India

Last Update Date : November 30, 2018

Professional Tax

Professional Tax is levied and collected by the State Government at various slab rates on every individual who earns his livelihood by the way of profession, trade, calling or employment. It is one such tax which differs from state to state. It is restricted to a maximum limit of ₹ 2,500 and allowed as a deduction under section 16 of the Income Tax Act, 1961.

What is Professional Tax?

Professional tax is a tax levied and collected by the State Government on every single earning individual who earns a living through any medium which can be a profession, trade, calling or employment. However, it should not be mixed with the professionals that means doctors, chartered accountants, lawyers, etc. Clause (2) of Article 276 of the Constitution of India provides the right to the State Government for levy and collection of professional tax or tax on the profession.

As the rights remain with the State Government, certain states do not charge professional tax too. The tax is levied based on the slab rates depending upon the income of the individual. However, the maximum amount any State can levy as Professional Tax is restricted to ₹ 2,500. The amount paid as Professional Tax is allowed as a deduction under section 16 of the Income Tax Act, 1961 and the income tax on the balance amount shall be calculated as per the slabs applicable.

Who is liable to pay Professional Tax?

In case of the salaried employees, the professional tax needs to be deducted from the salary by the employer on monthly basis and paid to the state government. If an individual is self-employed or in case he has no employer, the individual himself is liable to pay the professional tax.
However, a non-employed individual can register for professional tax by applying through a form. The registration number is issued after successful registration. Professional Tax can be paid under this registration number at various banks.

How to Calculate Professional Tax?

You can calculate your Professional Tax liability on the basis of your gross salary and tax slab prescribed by the state government levying Professional Tax. Currently, only 15 states levy the Professional Tax in India. The slab rates differ from state to state.

e.g., in Andhra Pradesh, the Professional Tax rates are as follows:

  • Gross income up to Rs 15,000 there will be nil tax
  • For Rs 15,001 to 20,000, it is Rs. 150 per month
  • For Rs 20,001 and above,it is Rs. 200 per month

How to pay Professional Tax Online in Maharashtra?

If you are liable to Professional tax in Maharashtra, you can easily pay it online. If your annual liability of Professional Tax crosses Rs 50,000, you need to make tax payment online as well as file return every month compulsorily. These two tasks must be done by the end of the subsequent month. However, if your annual Professional Tax liability does not exceed Rs 50,000, you can pay the total tax in full at the end of the FY and file the return. To make e-payment of Professional Tax, please follow the step-by-step procedure as explained below:

  • Step 1: Visit Mahagst website
  • Step 2: Hover the mouse pointer over “e-payment” box and choose “Advance Payment – Returns” option
  • Step 3: You will see 4 options namely TIN, PAN, TAN and Old Act. Select “TIN” option, enter your PTE number, captcha code and click on “Next” to proceed
  • Step 4: Your PTE number will appear on the screen along with your name. You will also see a number of boxes, each with a drop-down menu. Select Act as PTEC ACT, Form

ID as Form_VIII. Choose appropriate financial year and period. In the “Location” box, choose the place of your registration.Enter the amount of tax payable and mobile number. Now, click on “Proceed for Payment”

  • Step 5: Click on “Agree” button.
  • Step 6: Click on SBI ePay or GRAS if your bank is not supported by SBI epay
  • Step 7: After Choosing your bank Click on “Pay Now”
  • Step 8: Now you will be taken to ‘internet banking’ page of your bank. Enter your netbanking user id and password and make the payment
  • Step 9: After successful payment of tax, a challan will appear on the screen. Print and save the challan and keep it safely with you

Professional Tax Exemption Clauses

Professional tax is not applicable where:

  • An assessee has completed 65 years of age. For the state of Karnataka it is 60 years.
  • A person suffering 40% or more of permanent physical disability or blindness.
  • Parent or guardian of a physically challenged or mentally retarded child.

However, it should be noted that the above provisions can vary in different states.

Penalty for late payment of Professional Tax

  • In case of delay in obtaining the registration certificate, a penalty of ₹ 5 per day in case of the employer and ₹ 2 per day in case of a non-employed individual shall be imposed.
  • In case of delay in payment of professional tax, a penalty of 2% per month of the amount of tax shall be levied. However, in case of non-payment of such professional tax, the assessee would attract an additional penalty of 10% of the amount of tax due.
  • In case of delay in filing the returns, a penalty of ₹ 1,000 shall be charged if the returns are filed within 1 month after the due date. Where the return is not filed even after 1 month post the due date of filing return, the penalty shall be ₹ 2,000.
  • If the information provided by the individual at the time of enrolment is found incorrect or false, it shall attract the penalty of three times of the professional tax payable.

Professional Tax Slab in Maharashtra

Monthly salary (₹) Tax per month (₹)
Up to ₹ 7,500/- for men NIL
Up to ₹ 10,000/- for women NIL
From ₹ 7,500/- to ₹ 10,000/- ₹ 175/-
₹ 10,000/- and above ₹ 200/- (₹ 300/- for the month of February)

Professional Tax Slab in Karnataka

Monthly salary (₹) Tax per month (₹)
Up to ₹ 15,000/- NIL
Above ₹ 15,000/- ₹ 200/-

Professional Tax Slab in Gujarat

Monthly salary (₹) Tax per month (₹)
Up to ₹ 5,999/- NIL
From ₹ 6,000/- to ₹ 8,999/- ₹ 80/-
From ₹ 9,000/- to 11,999/- ₹ 150/-
₹ 12,000/- and Above ₹ 200/-

Professional Tax Slab in West Bengal

Monthly salary (₹) Tax per month (₹)
Up to ₹ 8,500/- NIL
From ₹ 8,501/- to ₹ 10,000/- ₹ 90/-
From ₹ 10,001/- to ₹ 15,000/- ₹ 110/-
From ₹ 15,001/- to ₹ 25,000/- ₹ 130/-
From ₹ 25,001/- to ₹ 40,000/- ₹ 150/-
Above ₹ 40,000/- ₹ 200/-

Professional Tax Slab in Madhya Pradesh

Annual salary (₹) Tax per month (₹)
Up to ₹ 1,50,000/- NIL
From ₹ 1,50,001 to ₹ 1,80,000/- ₹ 125/-
Above ₹ 1,80,000/- ₹ 212/-

Professional Tax Slab in Tamil Nadu

Half yearly salary (₹) Tax per 6 months (₹)
Up to ₹ 21,000/- NIL
From ₹ 21,001 to ₹ 30,000/- ₹ 100/-
From ₹ 30,001 to ₹ 45,000/- ₹ 235/-
From ₹ 45,001 to ₹ 60,000/- ₹ 510/-
From ₹ 60,001 to ₹ 75,000/- ₹ 760/-
Above ₹ 75,000/- ₹ 1095/-

Professional Tax Slab in Andhra Pradesh

Monthly salary (₹) Tax per month (₹)
Up to ₹ 15,000/- NIL
From ₹ 15,001/- to ₹ 20,000/- ₹ 150/-
Above ₹ 20,000/- ₹ 200/-

Professional Tax Slab in Odisha

Monthly salary (₹) Tax per month (₹)
Up to ₹ 5,000/- NIL
From ₹ 5,001 to ₹ 6,000/- ₹ 30/-
From ₹ 6,001 to ₹ 8,000/- ₹ 50/-
From ₹ 8,001/- to ₹ 10,000/- ₹ 75/-
From ₹ 10,001/- to ₹ 15,000/- ₹ 100/-
From ₹ 15,001/- to ₹ 20,000/- ₹ 150/-
Above ₹ 20,000/- ₹ 200/-

Professional Tax Slab in Bihar

Annual salary (₹) Tax for the year (₹)
Up to ₹ 3,00,000/- NIL
From ₹ 3,00,001/- to ₹ 5,00,000/- ₹ 1,000/-
From ₹ 5,00,001/- to ₹ 10,00,000/- ₹ 2,000/-
Above ₹ 10,00,000/- ₹ 2,500/-

Professional Tax Slab in Telangana

Monthly salary (₹) Tax per month (₹)
Up to ₹ 15,000/- NIL
From ₹ 15,001/- to ₹ 20,000/- ₹ 150/-
Above ₹ 20,000/- ₹ 200/-

Professional Tax Slab in Assam

Monthly salary (₹) Tax per month (₹)
Up to ₹ 10,000/- NIL
From ₹ 10,001/- to ₹ 15,000/- ₹ 150/-
From ₹ 15,001/- to ₹ 25,000/- ₹ 180/-
Above ₹ 25,000/- ₹ 208/- (₹ 212/- for the month of February)

Professional Tax Slab in Sikkim

Monthly salary (₹) Tax per month (₹)
Up to ₹ 20,000/- NIL
From ₹ 20,001/- to ₹ 30,000/- ₹ 125/-
From ₹ 30,001/- to ₹ 40,000/- ₹ 150/-
Above ₹ 40,000/- ₹ 200/-

Professional Tax Slab in Meghalaya

Monthly salary (₹) Tax per month (₹)
Up to ₹ 4,166/- NIL
From ₹ 4,167/- to ₹ 6,250/- ₹ 16.50/-
From ₹ 6,251/- to ₹ 8,333/- ₹ 25/-
From ₹ 8,334/- to ₹ 12,500/- ₹ 41.50/-
From ₹ 12,501/- to ₹ 16,666/- ₹ 62.50/-
From ₹ 16,667/- to ₹ 20,833/- ₹ 83.33/-
From ₹ 20,834/- to ₹ 25,000/- ₹ 104.16/-
From ₹ 25,001/- to ₹ 29,166/- ₹ 125/-
From ₹ 29,167/- to ₹ 33,333/- ₹ 150/-
From ₹ 33,334/- to ₹ 37,500/- ₹ 175/-
From ₹ 37,501/- to ₹ 41,666/- ₹ 200/-
Above ₹ 41,666/- ₹ 208/- (₹ 212/- for the month of February)

Professional Tax Slab in Kerala

Monthly salary (₹) Tax per month (₹)
Up to ₹ 1,999/- NIL
From ₹ 2,000/- to ₹ 2,999/- ₹ 20/-
From ₹ 3,000/- to ₹ 4,999/- ₹ 30/-
From ₹ 5,000/- to ₹ 7,499/- ₹ 50/-
From ₹ 7,500/- to ₹ 9,999/- ₹ 75/-
From ₹ 10,000/- to ₹ 12,499/- ₹ 100/-
From ₹ 12,500/- to ₹ 16,666/- ₹ 125/-
From ₹ 16,667/- to ₹ 20,833/- ₹ 166/-
Above ₹ 20,834/- ₹ 208/- (₹ 212/- for the month of February)

Professional Tax Slab in Chattishgarh

Annual salary (₹) Tax per month (₹)
Up to ₹ 1,50,000/- NIL
From ₹ 1,50,001/- to ₹ 2,00,000/- ₹ 150/-
From ₹ 2,00,000/- to ₹ 2,50,000/- ₹ 180/-
From ₹ 2,50,001/- to ₹ 3,00,000/- ₹ 190/-
Above ₹ 3,00,000/- ₹ 200/-

Professional Tax Slab in Tripura

Monthly salary (₹) Tax per month (₹)
Up to ₹ 5,000/- NIL
From ₹ 5,001/- to ₹ 7,000/- ₹ 70/-
From ₹ 7,001/- to ₹ 9,000/- ₹ 120/-
From ₹ 9,001/- to ₹ 12,000/- ₹ 140/-
From ₹ 12,001/- to ₹ 15,000/- ₹ 190/-
Above ₹ 15,000/- ₹ 208/- (₹ 212/- for the month of February)

States and Union Territories where Professional Tax is not Applicable

STATES UNION TERRITORIES
Arunachal Pradesh Andaman & Nicobar
Haryana Chandigarh
Himachal Pradesh Delhi
Jammu & Kashmir Puducherry
Punjab Dadra & Nagar Haveli
Rajasthan Daman & Diu
Nagaland Lakshadweep
Uttaranchal
Uttar Pradesh

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