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Professional tax (salary)

Pursuing CA (Working) (149 Points)

02 February 2012

Dear Friends,

Please provide detail regarding professioan tax like whom it is imposed, amount, what is the criteriaof imposition etc its tax tratment.

Thanks a lot in advance,

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Satyajeet (Auditor) (58 Points)
Replied 02 February 2012

In India, the professional tax is imposed at the state level. However, not all the states impose this tax, the following states impose this levy in India – Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamilnadu, Gujarat, and Madhya Pradesh. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax.

Professional tax is levied by particular Municipal Corporations and majority of the Indian states impose this duty. It is a source of revenue for the government. The maximum amount payable per year is Rs.2,400/- and in line with your salary, there are predetermined slabs. It is paid by every member of staff employed in private companies. It is subtracted by the employer each month and sent to the Municipal Corporation. It is compulsory just like income tax. You will be eligible for income tax deduction for this payment.

Criteria in various states of India

In Maharashtra, this duty is applicable both on individuals and companies as laid down by the guidelines of the Maharashtra Professional Tax Act of 1975.

Every individual living in Maharashtra, involved in any business, profession, occupation or employment is legally responsible to pay it and has to get a Certificate of Enrolment from the Professional Authority.

As soon as you receive this certificate, you can fulfill your personal tax liability for 5 years by making a one-time payment, which is equivalent to the sum of Professional Tax for 4 years beforehand, getting relief for payment of one year.

In Tamil Nadu, it is imposed by the Municipal Council on businessmen, professionals, and employed individuals.

Every company which conducts business and every individual, who is involved directly in any business, occupation, or employment in the town panchayat on the first day of the half-year for which return has been submitted, needs to pay biannual tax at the rates stipulated.

Professional Tax Slabs in Various States

In West Bengal

Income	Tax to be imposed
Upto 1,500	Nil
From ` 1501 To Rs 2001	Rs. 18
From ` 2001 To Rs 3001	Rs. 25
From ` 3001 To Rs 5001	Rs. 30
Rs. 5001	Rs. 40
From ` 6001 -7001	Rs. 45
From Rs.7001 to Rs.8000	Rs.50
From Rs.8001 to Rs.9000	Rs.90
From Rs.9001 to Rs.15,000	Rs.110
From Rs.15001 to Rs.25,000	Rs.130
From Rs.25,001 to Rs.40,000	Rs.150
Beyond Rs.40,001	Rs.200

In Maharashtra

Income	Tax to be imposed
upto ` 2500	Nil
From ` 2500 to Rs 3500	Rs.60
From ` 3500 to Rs 5000	Rs.120
From ` 5000 to Rs 10000	Rs.175
More than Rs.10000	Rs 200

In Tamil Nadu

Income	Tax to be imposed
Upto Rs.21000	Nil
From Rs.21001 to Rs.30000	Rs.75
From Rs.30001 to Rs.45000	Rs.188
From Rs.45001 to Rs.60000	Rs.390
From Rs.60001 to Rs.75000	Rs.585
More than Rs.75001	Rs.810

In New Delhi

Income	Tax to be imposed
Upto Rs.1,10,000	Nil
From Rs.1,10,000 To ` 1,45,000	Nil
From Rs.1,45,000 To ` 1,50,000	10 %
From Rs.1,50,000 To ` 1,95,000	20 %
From Rs.1,95,000 To ` 2,50,000	20 %
More than Rs.2,50,000	30 %