Professional Tax For The Financial Year 2017-18
Professional Tax is a tax levied by the various State Governments of India on salaried individuals, working in government or non-government entities, or in practice of any profession, including Chartered Accountants, Doctors, Lawyers etc or carry out some form of business. This form of tax is in practice for a long time and States were conferred the power of leveling the Tax under Clause (2) of Article 276. The rate at which Professional tax is charged is based on the Income Slabs set by the respective State Governments. However the maximum Professional Tax that can be levied by any State till date is Rs 2500/-. The total amount of professional tax paid during the year is allowed as Deduction under the Income Tax Act. The professional tax is a source of revenue for the State Governments which helps the different in implementing schemes for the welfare and development of the region.
Professional Tax is deducted by the employers from the salary of the salaried employees and same is deposited with the State Government. For other individuals, they have to directly pay it to the Government or through the Local Bodies appointed to do so. The tax has to be collected and deposited as per the timeline provided by the respective State Government. In case, One fails to do so, penalty and late fee would be applicable.
The Tax may be paid to the Government on Monthly, Semi Annually or Annually basis depending on nature of business and the respective State Laws. Professional Tax Return needs to be filed at the end of the Financial Year.
For the Financial Year 2016-17, few states have made minor alteration which has been updated in this post. Any further changes or revision, I come to know will be updated at the earliest.
Recommendations have been made to enhance the Professional Tax rate which was last revised in 1988. But it will take sometime before the same is implemented. I have added the States which levy Professional Tax do update in case I have missed out on any or any additional details need to be included.
Let’s look at the Professional Tax Slabs of the States which levy the Professional Tax:-
Professional Tax levied on Business Houses.
Exemption from Paying Professional Tax (As per the Act)
Any person suffering from a permanent physical disability (including blindness)
Parents or guardian of any person who is suffering from mental retardation.
Persons who have completed the age of 65 years.(60 years in case of Karnataka)
Parents or guardians of a child suffering from a physical disability as specified in clause (C) w.e.f 1.10.1996.