The Professional Tax is a state-based tax levied on employees, self-employed individuals and professionals. The amount paid by each individual depends on their monthly income.
This tax applies to virtually all industries and professions, making it essential for all employers and self-employed individuals to obtain Professional Tax registration and file returns on time.
It is a tax levied by state governments
Professional tax is a type of state level tax levied on individuals who make an income through their profession. This tax applies to lawyers, doctors, accountants and other professionals who earn through their job or trade.
However, not all states levy this tax. Union territories also do not impose it.
Due to the tax structure, amounts paid differ between states due to slab rates. Furthermore, these taxes cannot be combined as one single amount because each slab varies.
Therefore, it is essential to comprehend and adhere to regulations. Failure to do so could result in penalties.
The owner of a business is responsible for deducting this tax from employees’ salaries. They must then submit their returns in the prescribed form within a specified time period.
It is a tax imposed on the working professionals
Professional tax is a type of tax levied on professionals such as doctors, lawyers, accountants and others in specialized fields. How it’s calculated and collected varies from state to state; furthermore, this amount collected varies considerably across jurisdictions.
Employees must pay this tax via their salaries to the government. You may pay this online or offline.
Taxation in India is governed by Article 276 of the Constitution and can be deducted from an employee’s salary. The annual maximum levied is INR 2500.
Most states in India levy professional tax, such as Assam, Bihar, Chhattisgarh, Gujarat, Karnataka, Kerala Madhya Pradesh Maharashtra Orissa Puducherry Punjab and Sikkim; however Delhi does not collect this fee.
It is a tax imposed on the self-employed
Professional tax is a direct tax levied against individuals who make an income from their profession, trade, calling or employment. This indirect fee is set by state governments.
Tax imposed primarily on self-employed individuals, similar to Social Security and Medicare deductions withheld from wages of most wage earners.
However, in certain states this tax is not applied and those earning their income through online businesses do not need to worry about paying it.
Self-employed individuals must register and pay their professional tax obligations on time to avoid penalties. Furthermore, they must provide accurate information when applying for an enrolment certificate or registration certificate.
It is a tax imposed on the salaried professionals
Professional tax is a type of direct tax levied on individuals who earn income through salary and practice a profession or trade. This fee is collected and enforced by the state government.
However, this tax is not mandatory. There are some individuals who do not need to pay this charge as they fall under certain categories.
For instance, those suffering from disabilities do not need to pay professional tax. Furthermore, those living in union territories don’t need to pay this tax because they are small regions with lower revenue generation compared to states.
Furthermore, some states provide tax rebates to professionals who pay their professional tax in one lump sum for several years consecutively. Therefore, it’s essential to check with your state regarding its rules and regulations regarding professional tax.