Professional tax may raise for Professionals
Doctors, lawyers and other professionals both salaried and self employed may now have to pay a higher professional tax.
Acceding a long-pending demand of the state governments, the Centre has decided to raise the ceiling on professional tax from Rs 2,500 to Rs 7,500 per annum. The Union Cabinet is expected
to take up the proposal on Thursday.
Professional tax is levied by state governments or local bodies on professions, trades, callings and employment. The power to levy the tax flows from Article 276 of the Constitution that also caps the tax amount. The Centre will amend Article 276 to raise the limit. Although Delhi does not impose the tax, states such as Karnataka, Maharashtra, West Bengal, Andhra Pradesh, Tamil Nadu and Gujarat do so.
The limit was fixed in 1998 at Rs 2,500 per annum. Increase in tax has been a long-pending demand of the states, pointing at rise in income levels in the past few years.
The Centre’s reluctance to state governments’ demand for a hike in the limit is borne out of the fact that taxpayers who pay professional tax are eligible for a deduction under the Income-Tax Act. So, while the state governments’ revenues grow, the Centre loses tax on this count.
However, with the direct tax collections witnessing stupendous growth, state governments had intensified pressure on the Centre. Their argument is that the tax does not have a substantial impact on Centre’s total kitty as the collection under this head by states was only Rs 3,500 crore.
Some state governments wanted the limit to be increased to Rs 10,000 per annum, but the Centre has agreed to raise it to Rs 7,500.
News posted by
CCI News Desk
Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.
Recent News :
- FEMA Amendment 2026: Inventory-Based E-Commerce Now Allowed for Indian Goods Exports
- Doctor Pays Rs 58 Crore in Tax on Rs 149 Crore Income, Sparks Debate Over Taxpayer Value
- Income from House Property Under Income Tax Act 2025
- ICAI President Highlights Financial Literacy, Digital Finance and Global Opportunities for CAs
- Central Excise Notifications September 2026: Check Revised Duty Rates
- ICAI Responds to Social Media Posts, Clarifies Council Governance and Key Financial Matters
- Gross GST Revenue August 2026 Collections Grow 14.8%, Refunds Rise 67.9%
- MCA Extends CCFS-2026 Deadline to 15th September 2026
- HUF Tax Rules 2026: New Tax Regime Slabs, Surcharge and Partition Provisions
- Indian CAs Set for Greater Recognition in Singapore Under Proposed ICAI-ISCA MRA
Popular News
- No Deduction of TDS Under IT Act 2025: Form 121 Rules for Individuals and Senior Citizens
- Maintenance of Books of Accounts Under Income Tax Act, 2025
- Income Tax Refund Rules Under Income Tax Act, 2025: How to Claim Excess Tax Paid
- HUF Tax Rules 2026: New Tax Regime Slabs, Surcharge and Partition Provisions
- Specified Senior Citizens: TDS Rules on Pension and Interest Income Under Income Tax Act, 2025
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
