What is professional tax?
- Professional tax is levied by state government on the income earned by the way of profession, trade, calling or employment.
- The power to levy professional tax has been given to the states by way of clause (2) of Article 276 of the constitution of India.
Deducted and Paid By?
- In case of salaried and wage earners, the professional tax is liable to be deducted by the employer from the salary/wages and the same is to be deposited to the state government.
- In case of other class of individuals, this tax is liable to be paid by the employee himself.
Professional tax Rates
- If you are salaried employee earning above Rs.12000 per month then you are liable to pay
- 200 per month. The Annual Professional Tax is Max Rs.2500.
|Monthly Salary or Wages||Tax Rates|
|Up to Rs 5999||Nil|
|Rs 6000 to 8999||Rs 80 Per Month|
|Rs 9000 to 11999||Rs 150 Per Month|
|Rs 12000 and Above||RS 200 Per Month|
- The Employer has to get registered even if he is responsible to deduct tax from the salary of one employee.
- Form No 1 is the Application form for Registration.
- The time limit for registration is 60 days from the date of accruing liability under the Act.
- The Employer has to get separate registration for each of his Branch.
Deposit of Amount Deducted
- Employers covered under the jurisdiction of “State Government” as designated authority shall pay in the treasury by Challan through the bank. Other employers shall pay at the place of payment declared by the Designated Authorities concerned.
- If an employer has employed more than 20 employees, he is required to make payment within 15 days from the end of the month. However, if an employer has less than 20 employees, he is required to pay quarterly (i.e. by the 15th of next month from the end of the quarter).