06 September 2014
It is levied by the State Government on the Income earned by way of profession, trade, employment. Professional Tax is collected by the State Government. Tax is levied on slab basis and varied state to state as per state law.
08 October 2021
Professional tax being levied by the State Government, is different in different states. Every state has its own laws and regulations to govern professional tax of that particular state. However, all the states do follow a slab system based on the income to levy professional tax.
Further, Article 276 of the Constitution which empowers the State Government to levy professional tax also has provided for a maximum cap of Rs 2,500 beyond which professional tax cannot be charged on any person.
In case of employees, an employer is a person responsible to deduct and pay professional tax to the State Government subject to the monetary threshold if any provided by respective State’s legislation.
An employer (corporate, partnership firms, sole proprietorship etc) also being a person carrying on trade/profession is also required to pay professional tax on his trade/profession again subject to the monetary threshold if any provided by respective State’s legislation. In such a case, the employer needs to register and obtain both a professional tax registration certificate to be able to pay professional tax on his trade/profession and professional tax enrollment certificate to be able to deduct the tax from his employees and pay. Further, separate registration may be required for each office depending on the respective State’s legislation.
Persons who are carrying on freelancing business without any employees are also required to register themselves subject to the monetary threshold if any, provided by the respective State’s legislation.
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