Dear all pls tell me what is meant by professinal tax . what is rate of it. whether it is central or state level tax.and its effect on salary computation from income tax prospect.
Devadas K S
(One life one Dream)
(3525 Points)
Replied 31 July 2011
If you are a professional or a working individual of a reputed organization, then you are required to pay professional tax. Professional tax in India is a state-level duty.
What is professional tax?
In India, this tax is imposed by various states. It is imposed on business owners, working individuals, merchants and people carrying out various occupations. The following states impose this levy in India - Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamilnadu, Gujarat, and Madhya Pradesh.
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 ` 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 as income tax. You will be eligible for income tax deduction for this payment.
Criteria in various states of India
In Maharashtra, this duty is applicable both on individuals and companies as laid down by the guidelines of the Maharashtra Professional Tax Act of 1975.
Every individual living in Maharashtra, involved in any business, profession, occupation or employment is legally responsible to pay it and has to get a Certificate of Enrolment from the Professional Authority.
As soon as you receive this certificate, you can fulfill your personal tax liability for 5 years by making a one-time payment, which is equivalent to the sum of Professional Tax for 4 years beforehand, getting relief for payment of one year.
In Tamil Nadu, it is imposed by the Municipal Council on businessmen, professionals, and employed individuals.
Every company which conducts business and every individual, who is involved directly in any business, occupation, or employment in the town panchayat on the first day of the half-year for which return has been submitted, needs to pay biannual tax at the rates stipulated.
Professional Tax Slabs in Various States
In West Bengal
| Income | Tax to be imposed |
| Upto 1,500 | Nil |
| From ` 1501 To ` 2001 | ` 18 |
| From ` 2001 To ` 3001 | ` 25 |
| From ` 3001 To ` 5001 | ` 30 |
| ` 5001 | ` 40 |
| From ` 6001 -7001 | ` 45 |
| From ` 7001 to ` 8000 | ` 50 |
| From ` 8001 to ` 9000 | ` 90 |
| From ` 9001 to ` 15,000 | ` 110 |
| From ` 15001 to ` 25,000 | ` 130 |
| From ` 25,001 to ` 40,000 | ` 150 |
| Beyond ` 40,001 | ` 200 |
In Maharashtra
| Income | Tax to be imposed |
| upto ` 2500 | Nil |
| From ` 2500 to ` 3500 | ` 60 |
| From ` 3500 to ` 5000 | ` 120 |
| From ` 5000 to ` 10000 | ` 175 |
| More than ` 10000 | ` 200 |
In Tamil Nadu
| Income | Tax to be imposed |
| Upto ` 21000 | Nil |
| From ` 21001 to ` 30000 | ` 75 |
| From ` 30001 to ` 45000 | ` 188 |
| From ` 45001 to ` 60000 | ` 390 |
| From ` 60001 to ` 75000 | ` 585 |
| More than ` 75001 | ` 810 |
In New Delhi
| Income | Tax to be imposed |
| Upto ` 1,10,000 | Nil |
| From ` 1,10,000 To ` 1,45,000 | Nil |
| From ` 1,45,000 To ` 1,50,000 | 10 % |
| From ` 1,50,000 To ` 1,95,000 | 20 % |
| From ` 1,95,000 To ` 2,50,000 | 20 % |
| More than ` 2,50,000 |
30 % |
CAclubindia
