All about Professional Tax

Neethi V. Kannanth | Last updated: 24 May 2022

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Quick Summary

Professional tax is a state-levied tax on individuals earning income through professions, employment, or trade. The amount varies significantly between states, with a maximum annual limit of Rs. 2,500. Self-employed individuals must enrol and pay the tax themselves, while employers deduct it from salaried employees' wages and deposit it with the government. Importantly, professional tax paid by employees is deductible from their gross salary income under the Income Tax Act.

Professional tax is a tax levied on persons earning income either by way of practicing profession, employment, trade etc. It is levied by the State Government or the Union Territory and not by the Central Government.

Applicability of Professional Tax

Professional tax is applicable to the following-

Individual
Hindu Undivided Family
Company
Firm
Co-operative Society
Association of Person
Body of Individuals

Professional Tax Explained: Rates, Applicability and Payment

Amount of Professional Tax

Since the tax is levied by the State Government, the amount of professional tax to be deducted varies from State to State. But the maximum professional tax leviable is restricted to Rs. 2,500/- on any person in a financial year.

The amount at which professional tax is payable in various states is given below-

State	Income per Month	Tax Rate/Tax Amount (p.m.)
Andhra Pradesh	Less than Rs. 15,000	Nil
	Rs. 15,000 to less than Rs. 20,000	Rs. 150
	Rs. 20,000 and above	Rs. 200
Gujarat	Up to Rs. 5999	Nil
	Rs. 6000 to Rs. 8999	Rs. 80
	Rs. 9000 to Rs. 11999	Rs. 150
	Rs 12000 and above	Rs. 200
Karnataka	Up to Rs. 15,000	Nil
Karnataka	Rs. 15,001 onwards	Rs. 200
Kerala (Half yearly income slabs and half yearly tax payment)	Up to Rs.11,999	Nil
	Rs.12,000 to Rs.17,999	Rs.120
	Rs.18,000 to Rs. 29,999	Rs.180
	Rs.30,000 to Rs. 44,999	Rs.300
	Rs.45,000 to Rs. 59,999	Rs.450
	Rs.60,000 to Rs. 74,999	Rs.600
	Rs.75,000 to Rs. 99,999	Rs.750
	Rs.1,00,000 to Rs. 1,24,999	Rs.1000
	Rs.1,25,000 onwards	Rs.1250
Maharashtra	Up to Rs. 7,500	Nil (for male)
	Up to Rs. 10,000	Nil (for female)
	From Rs. 7,500 to Rs. 10,000	Rs. 175 (for male)
	Rs. 10,000 onwards	Rs. 200 for 11 months + Rs. 300 for 12th month
Telangana	Up to Rs. 15,000	Nil
	Rs.15,001 to Rs.20,000	Rs. 150
	Rs.20,001 onwards	Rs.200
	Up to 5 years (For professionals such as legal practitioners, CA, architects, etc.)	Nil
	Over 5 years (For professionals such as legal practitioners, CA, architects, etc.)	Rs. 2,500 (per annum)
West Bengal	Up to 10,000	Nil
	10,001 to 15,000	Rs. 110
	15,001 to 25,000	Rs. 130
	25,001 to 40,000	Rs. 150
	40,001 and above	Rs. 200

Payment of Professional Tax

Self Employed Persons - The persons who carry out their profession or trade are required to pay professional tax themselves to the State Government.It can either be paid monthly or annually at their choice. Further, self-employed taxpayers are required to obtain a Certificate of Enrolment from the prescribed authority in the manner prescribed for the purpose of remittance of professional tax.
Salaried Employees or Wage Earners - The employer is liable to deduct professional tax on monthly basis from the salary or wages in accordance with the slab applicable and deposit the same to the State Government. In this case, the employer is required to obtain a Certificate of Registration from the prescribed authority in order to remit the professional tax deducted.

Deduction under Income Tax

The professional tax paid by an employee is allowed as a deduction from his/her gross salary income under Section 16 (iii) of the Income Tax Act 1961.