1. Introduction-
Professional tax levied under section 276(2) of Indian Constitution. The professionals earning an income from salary or other practices such as a lawyer, teacher, doctor, chartered accountant, etc. are required to pay professional tax.
The maximum amount of Professional Tax is restricted to ₹ 2,500. The amount paid as Professional Tax is allowed as a Deduction from Salary under section 16 of Income Tax Act, 1961 and the income tax on the balance amount shall be calculated as per the tax slab.
2. Registration under Professional Tax-
These states/union territories where professional tax payment is applicable the employer should apply for registration within 30 days of employing worker/staff in a business or in case of professionals (non-employed), 30 days from start of the practice.
Penalty has been imposed in case of delay in obtaining the registration certificate, Rs. 5 per day in case of the employer and Rs. 2 per day in case of a non-employed individual shall be imposed.
3. Liability to pay professional tax-
- In case of salaries/ wages, the professional tax is to be deducted by the employer from the salary/wages of employee every month, and to be deposited with the state government with in the time limit as prescribed. If an employer has employed more than 20 employees, he is required to make the 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).
- In case of others, the professional tax is liable to pay by the person himself individually.
Example 1-
Mr. X has Salary of Rs. 3, 00,000 and pay professional tax of Rs. 1,500 during the year. What is the treatment of professional tax?
Answer-
|
Particulars
|
Amount (Rs.)
|
|
Income from Salary-
|
|
Salary Income
|
3,00,000
|
|
Less: Deductions-
|
|
|
Professional tax paid
|
1,500
|
|
Income from Salary
|
2,98,500*
|
*Note- Rs. 2, 98,500 is taxable as Income from salary under Income Tax
5. States/Union territories where Professional Tax is applicable or States/Union territories where professional tax is not applicable-
There are 29 states or 7 union territories i.e. total of 36’s in India, out of which 18 states or 1 union territory in which professional tax is applicable or 11 states or 6 union territories in which professional tax is not applicable. The details are as under-
|
S. No.
|
Applicable State/ Union Territories
|
Not Applicable State/ Union Territories
|
|
1
|
Andhra Pradesh
|
Andaman & Nicobar Islands
|
|
2
|
Assam
|
Arunachal Pradesh
|
|
3
|
Bihar
|
Chandigarh
|
|
4
|
Gujarat
|
Dadra and Nagar Haveli
|
|
5
|
Karnataka
|
Daman and Diu
|
|
6
|
Odisha
|
Delhi
|
|
7
|
Meghalaya
|
Haryana
|
|
8
|
Madhya Pradesh
|
Himachal Pradesh
|
|
9
|
Maharashtra
|
Jammu & Kashmir
|
|
10
|
Sikkim
|
Lakshadweep
|
|
11
|
Tamil Nadu
|
Rajasthan
|
|
12
|
Telangana
|
Uttar Pradesh
|
|
13
|
Tripura
|
Uttaranchal
|
|
14
|
West Bengal
|
Mizoram
|
|
15
|
Punjab
|
Nagaland
|
|
16
|
Pondicherry
|
Chhattisgarh
|
|
17
|
Jharkhand
|
Goa
|
|
18
|
Manipur
|
|
|
19
|
Kerala
|
|
6. Rates of professional tax in applicable states/union territories-
|
S. No.
|
Name of States
|
Amount of Salary/Wages per month (in Rs.)
|
Amount of Professional Tax per month (in Rs.)
|
|
1
|
Andhra Pradesh
|
Up to Rs. 15,000
|
Nil
|
|
Rs. 15001 to 20,000
|
150/-
|
|
Above Rs. 20,000
|
200/-
|
|
2
|
Assam
|
Up to Rs. 10,000
|
Nil
|
|
Rs. 10,000 to 15,000
|
150/-
|
|
Rs. 15001 to 25,000
|
180/-
|
|
Above Rs. 25,000
|
208.33 (say total Rs. 2,500 yearly)
|
|
3
|
Bihar
|
Up to Rs. 25,000
|
Nil
|
|
Rs. 25,001 to 41,666
|
83.33 (say total Rs. 1,000 yearly)
|
|
Rs. 41,667 to 83,333
|
166.67 (say total Rs. 2,000 yearly)
|
|
Above Rs. 83,334
|
208.33 (say total Rs. 2,500 yearly)
|
|
4
|
Gujarat
|
Below Rs. 6,000
|
Nil
|
|
Rs. 6,000 to 8,999
|
80/-
|
|
Rs. 9,000 to 11,999
|
150/-
|
|
Rs. 12,000 and above
|
200/-
|
|
5
|
Karnataka
|
Up to Rs. 15,000
|
Nil
|
|
Above Rs. 15,000
|
200/-
|
|
6
|
Odisha
|
Up to Rs. 5,000
|
Nil
|
|
Rs. 5,001 to 6,000
|
30/-
|
|
Rs. 6,001 to 8,000
|
50/-
|
|
Rs. 8,001 to 10,000
|
75/-
|
|
Rs. 10,001 to 15,000
|
100/-
|
|
Rs. 15001 to 20,000
|
150/-
|
|
Above Rs. 20,000
|
200/-
|
|
7
|
Meghalaya
|
Up to Rs. 4,166
|
Nil
|
|
Rs. 4,167 to 6,250
|
16.67 (say total Rs. 200 yearly)
|
|
Rs. 6,251 to 8,333
|
25/-
|
|
Rs. 8,334 to 12,500
|
41.67 (say total Rs. 500 yearly)
|
|
Rs. 12,501 to 16,666
|
62.50/-
|
|
Rs. 16,667 to 20,833
|
83.33 (say total Rs. 1,000 yearly)
|
|
Rs. 20,834 to 25,000
|
104.17 (say total Rs. 1,250 yearly)
|
|
Rs. 25,001 to 29,166
|
125/-
|
|
Rs. 29,167 to 33,333
|
150/-
|
|
Rs. 33,334 to 37,500
|
175/-
|
|
Rs. 37,501 to 41,666
|
200/-
|
|
Above Rs. 41,666
|
Rs. 208/-per month (in the month of February i.e. Rs. 212/-)
|
|
8
|
Madhya Pradesh
|
Up to Rs. 18,750
|
Nil
|
|
Rs. 18,751 to 25,000
|
125/-
|
|
Rs. 25,000 to 33,333
|
166.67 (say total Rs. 2,000 yearly)
|
|
Above Rs. 33,333
|
Rs. 208/-per month (in the month of February i.e. Rs. 212/-)
|
|
9
|
Maharashtra
|
For Men
|
|
Up to Rs. 7,500
|
Nil
|
|
Rs. 7,501 to 10,000
|
175/-
|
|
Above Rs. 10,000
|
Rs. 200/-per month (except in the month of February i.e. Rs. 300/-)
|
|
For Women
|
|
Up to Rs. 10,000
|
Nil
|
|
Above Rs. 10,000
|
Rs. 200/-per month (except in the month of February i.e. Rs. 300/-)
|
|
10
|
Sikkim
|
Up to Rs. 20,000
|
Nil
|
|
Rs. 20,001 to 30,000
|
125/-
|
|
Rs. 30,001 to 40,000
|
150/
|
|
Above Rs. 40,000
|
200/-
|
|
11
|
Tamil Nadu
|
Up to Rs. 21,000 (Half Yearly)
|
Nil
|
|
Rs. 21,001 to 30,000 (Half yearly)
|
135/- (Half Yearly)
|
|
Rs. 30,001 to 45,000 (Half Yearly)
|
315/- (Half Yearly)
|
|
Rs. 45,001 to 60,000 (Half Yearly)
|
690/- (Half Yearly)
|
|
Rs. 60,001 to 75,000 (Half Yearly)
|
1025/- (Half Yearly)
|
|
Above Rs. 75,000 (Half Yearly)
|
1250/- (Half Yearly)
|
|
12
|
Telangana
|
Up to Rs. 15,000
|
Nil
|
|
Rs. 15,001 to 20,000
|
150/-
|
|
Above Rs. 20,000
|
200/-
|
|
13
|
Tripura
|
Up to Rs. 7,500
|
Nil
|
|
Rs. 7,501 to 15,000
|
150/-
|
|
Above Rs. 15,000
|
Rs. 208/-per month (in the month of February i.e. Rs. 212/-)
|
|
14
|
West Bengal
|
Up to Rs. 10,000
|
Nil
|
|
Rs. 10,001 to 15,000
|
110/-
|
|
Rs. 15,001 to 25,000
|
130/-
|
|
Rs. 25,001 to 40,000
|
150/-
|
|
Above Rs. 40,000
|
200/-
|
|
15
|
Punjab
|
Salary/wages exceeds Rs. 2,50,000 per annum
|
200/- per month
|
|
Income from Business or Profession exceeds Rs. 2,50,000 per annum
|
200/- per month
|
|
16
|
Pondicherry
|
Up to Rs. 3,500
|
Nil
|
|
Rs. 3,501 to 5,000
|
16.66 per month (say total Rs. 200/- yearly )
|
|
Rs. 5,001 to 9,000
|
40/-
|
|
Rs. 9,001 to 10,000
|
150/-
|
|
Rs. 10,001 to 12,500
|
126.66 per month (say total Rs. 200/- yearly )
|
|
Above Rs. 12,500
|
182.50 per month
|
|
17
|
Jharkhand
|
Up to Rs. 25,000
|
Nil
|
|
Rs. 25,001 to 41,666
|
100/-
|
|
Rs. 41,667 to 66,666
|
150/-
|
|
Rs. 66,667 to 83,333
|
175/-
|
|
Above Rs. 83,333
|
Rs. 208/-per month (in the month of February i.e. Rs. 212/-)
|
|
18
|
Manipur
|
Up to Rs. 4,166
|
Nil
|
|
Rs. 4,167 to 6,250
|
100/-
|
|
Rs. 6,251 to 8,333
|
167/-
|
|
Rs. 8,334 to 10,416
|
200/-
|
|
Above Rs. 10,416
|
Rs. 208/-per month (in the month of February i.e. Rs. 212/-)
|
|
19
|
Kerala
|
Below Rs. 2,000
|
Nil
|
|
Rs. 2,000 to 2,999
|
20/-
|
|
Rs. 3,000 to 4,999
|
30/-
|
|
Rs. 5,000 to 7,499
|
50/-
|
|
Rs. 7,500 to 9,999
|
75/-
|
|
Rs. 10,000 to 12,499
|
100/-
|
|
Rs. 12,500 to 16,666
|
125/-
|
|
Rs. 16,667 to 20,833
|
166/-
|
|
Above Rs. 20,833
|
Rs. 208/-per month (in the month of February i.e. Rs. 212/-)
|
7. Professional Tax Exemption, where it is not applicable-
- An Individual above the age of 65 years but the age limit for Karnataka is 60 years.
- An individual suffering from a permanent physical disability (including blindness).
- A person suffering 40% or more of permanent physical disability or blindness.
- Parent or guardian of a physically challenged or mentally retarded child.
8. Clause of Penalty–
- Penalty for late payment of Professional Tax –will be charged @ 2% per month of tax amount.
- Penalty for non-payment of Professional Tax –will be additional charged @ 10% of tax amount.
- Penalty for non-filing of return- -If the return is not filed within 1 month from the due date Rs. 1,000 will be charged otherwise Rs. 2,000 will be charged.