Professional Tax in India for Various States

Seems Indian constitution has most number of taxes for common man in India. Whether you are a promoter of private or public listed company, established trader / business man or just an employee, you have to pay income tax as per constitution. You might have paid at least 5 taxes from the various taxes mentioned below as per constitution of India. Most common taxes are sales tax, consumption tax, entertainment tax, gift tax, property tax, value added tax, dividend distribution tax, professional tax etc. In this article, let’s understand professional tax which is levied on professions and traders in India. 

What is Professional Tax and who comes under the purview of this tax?

Professional tax is imposed at the state level and has to be compulsorily paid by business owners, employees in public and private companies, merchants and people carrying out various other occupations.  

Which states have levied professional tax?

In India, not all states impose additional burden of professional tax to the common man. The state governments of following states impose this tax – Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Maharashtra, Meghalaya, Madhya Pradesh, Orissa, Karnataka, Kerala, Tamil Nadu, Tripura and West Bengal. 

What is the amount of professional tax?

Professional tax is another source of income for the government. It is imposed by state municipal corporations in India. The maximum amount payable towards professional tax is Rs 2,500 p.a. which is calculated in line with gross salary of an employee and there are predetermined slabs based on income for professional tax which varies across the states in India.  

Who deducts professional tax?

Every month professional tax is deducted by the employer from the salaries of staff employed (employees). This collective amount is paid to respective state municipal corporations by an employer. It is mandatory for companies to collect the tax from employees and professionals (business men), who have to pay from their own pockets. Employers need to furnish a return to the tax department in the prescribed form within the specified time frame. Maintain the proof of tax paid since you will be eligible for income tax deduction for this payment. 

How to register for Professional Tax?

If you are a company, approach your state tax department and apply for registration certificate within 30 days after hiring staff for your new operations.

In case, your company has operations in different states of India, than apply separately to respective state authority since the place of work (operations) comes under the jurisdiction of that authority. Professional taxes will be charged as per tax slab of respective state jurisdiction.   

Professional tax slabs applicable for some of the states is given below:

 State: Maharashtra

Monthly Salary	Amount payable
Up to Rs 5,000	Nil
Rs 5,001 to Rs 10,000	Rs 175 per month
More than Rs 10,000	Rs 200 per month

State: Karnataka

Monthly Salary	Amount payable
Up to Rs 10,000	Nil
Rs 10,000 to Rs 14,999	Rs 150 per month
More than Rs 15,000	Rs 200 per month

State: Andhra Pradesh

Monthly Salary	Amount payable
Up to Rs 15,000	Nil
Rs 15,001 to Rs 20,000	Rs 150 per month
More than Rs 20,000	Rs 200 per month

State: Gujarat

Monthly Salary	Amount payable
Up to Rs 5,999	Nil
Rs 6,000 to Rs 8,999	Rs 80 per month
Rs 9,000 to Rs 11,999	Rs 150 per month
More than 12,000	Rs 200 per month

State: Madhya Pradesh

Monthly Salary	Amount payable
Up to Rs 12,500	Nil
Rs 12,501 to Rs 14,999	Rs 125 per month
More than Rs 15,000	Rs 208 per month