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.
There is no professional tax in Delhi. In December 2004, the MCD decided to impose professional tax on those residing and working in the Capital from April 1, 2005. However, this proposal was rejected by the Standing Committee of the Municipal Corporation of Delhi.
CAclubindia
