Professional tax may raise for Professionals
Last updated: 18 July 2008
Follow on
Google News
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.
Comments
Recent News :
- Income Tax Department Enables Online Challan Correction Facility
- RBI Withdraws Obsolete FEMA Circulars to Simplify Foreign Exchange Regulatory Framework
- RBI Issues TReDS Directions 2026, Simplifies Framework for MSME Financing
- ICSI Urges Members to Update Contact Details Ahead of Election Process
- Finance Ministry Notifies Jan Vishwas Act Amendments for RBI, LIC, Insurance and PFRDA Laws from 23rd June 2026
- ICAI President Calls Yoga a Blueprint for Balanced Professional Life on Yoga Day 2026
- MCA Extends Name Reservation and E-Form Resubmission Deadlines Till July 10, 2026
- MCA Extends DPT-3 Filing Due Date: No Additional Fees Till 31st July 2026
- Finance Ministry Notifies 7.70% NSSF Special Securities for FY 2026-27
- ITR-3 Utility Released for AY 2026-27: Excel Utility, JSON Schema and Validation Files Now Available
Popular News
- GSTN Issues Advisory on e-Invoice API and e-Way Bill by IRN API Changes Effective from 1st August 2026
- ICAI 40 Under 40 Awards 2026: Nominations Open for Young Chartered Accountants
- MCA Extends DPT-3 Filing Due Date: No Additional Fees Till 31st July 2026
- RBI Streamlines Payment System Regulations with Comprehensive Master Directions
- Income Tax Act 2025: Key FAQs on Proposed Tax Exemption for FIIs Investing in G-Secs
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
