TAXAJ

Professional Tax Returns & Compliance Filing

Professional tax is just like Income Tax except for the fact that Income Tax is collected by the Central Government and Professional Tax is collected by the State Government. When this tax was first introduced in India, the maximum limit on the tax to be collected was Rs. 250.

Some of the State Governments have represented that the earlier celling of two hundred and fifty rupees which was fixed in 1949, needs to be revised upwards taking into consideration the price rise and other factors. It is also pointed out that the profession tax has, at present, become almost regressive because of the ceiling since even people with high salaries have to pay this tax at only the maximum amount of two hundred and fifty rupees per annum. The upward revision of profession tax has helped the State Governments in raising additional resources.

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About This Plan

File monthly Professional Tax Returns online through TAXAJ platform.
Created by potrace 1.15, written by Peter Selinger 2001-2017

Timeline

It usually takes 2 to 3 working days.

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Services Covered
Who Should Buy
How It's Done
Documents Required
Services Covered

  • Preparation of Salary/Wages Register
  • Bulk PAN Verification
  • Challan Verification
  • Online Challan Generation and Submission
  • Filing of Professional Tax Returns
Who Should Buy
Businesses liable to file Professional Tax Returns
How It's Done

    • Purchase of plan
    • FIll in the details in the template provided
    • Upload documents on vault
    • Return form prepared by Tax Expert
    • Filed by Our Experts
Documents Required
  • Salary Details of Employees/Labours
  • Details of Employer
  • Details of responsible person
  • Challan details

Professional Tax is Applicable in which States?

Professional Tax Applicable in States

Professional Tax Not Applicable in States

18.Arunachal Pradesh
19.Delhi
20.Goa
21.Haryana
22.Himachal Pradesh
23.Jammu & Kashmir
24.Jharkhand
25.Nagaland
26.Punjab
27.Rajasthan
28.Sikkim
29.Uttar Pradesh
30.Uttaranchal
31.Andaman & Nicobar
32.Chandigarh
33.Daman & Diu
34.Dadra & Nagar Haveli
35.Lakshadeep

What is Professional tax and who levies it?

The nomenclature ‘Professional tax’ could be one of those terms which do not completely convey the real meaning of the term. Unlike the name suggests, it is just not the tax levied only on professionals. It is a tax on all kinds of professions, trades, and employment and levied based on the income of such profession, trade and employment. It is levied on employees, a person carrying on business including freelancers, professionals, etc., subject to income exceeding the monetary threshold if any.

As per Article 246 of the Constitution of India, only Parliament has the exclusive power to make laws with respect to the Union List which includes taxes on income. The state has the power to make laws only with respect to the Concurrent and State list.

However, professional tax though is a kind of tax on income levied by State Government (not all states in the country chose to levy professional tax). The State Government is also empowered to make laws with respect to professional tax though being a tax on income under Article 276 of the Constitution of India which deals with tax on professions, trades, callings and employment.

It may be noted that professional tax is a deductible amount for the purpose of Income-tax Act, 1961 and can be deducted from taxable income.

Professional Tax Rate for Different States

Professional Tax or Profession Tax is levied by the State Government on the income of the assessee. Under Article 276 of the Indian Constitution, the state governments are empowered to decide the rate for the professional tax in the state. The maximum amount that can be charged under this tax regime is Rs. 2500. In a few states, this tax is even levied on the basis of source of income.

Every state has their own slabs for this tax and here is a glimpse of the same –
Maharashtra
For MenNil up to Rs. 7500 
From Rs. 7500 – Rs. 10000Rs. 175
For Women Nil up to Rs. 10000
For all Above Rs. 10000Rs. 200 and Rs. 300 for the month of February 
West Bengal
Up to Rs. 8500Nil
From Rs. 8501 – Rs. 10000Rs. 90
From Rs. 10001 – Rs. 15000Rs. 110
From Rs. 15001 – Rs. 25000Rs. 130
From Rs. 25001 – Rs. 40000Rs. 150
Over and Above Rs. 40000Rs. 200
Andhra Pradesh
Up to Rs. 15000Nil
From Rs. 15001 – Rs. 20000Rs. 150
Above Rs. 20000Rs. 200
Tamil Nadu
Up to Rs. 21000Nil
From Rs. 21001 – Rs. 30000Rs. 100
From 30001 – Rs. 45000Rs. 235
From Rs. 40001 – Rs. 60000Rs. 510
From Rs. 60001 – Rs. 75000Rs. 760
From Rs. 75001 and above Rs. 1095

Similarly, there are different slabs and rates for the other states as well. For the month of February, the Professional Tax is a little higher than the rest of the eleven months in the year.

Who is responsible to collect and pay professional tax?

Professional tax is collected by the Commercial Tax Department. The commercial tax department of the respective states collect it which ultimately reaches the fund of municipality corporation.

Persons responsible to pay professional tax

  •  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 (corporatespartnership 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 enrolment 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. 
    However, a professional tax levy is subject to the exemption provided by the respective State to certain categories. For example, parents or guardian of any person who is suffering from mental retardation, blind persons are exempted among others from levy of Karnataka Professional tax.

What is the procedure to pay professional tax? Is any return to be filed?

This is again a State-specific query. However, in general, a professional tax may be paid either online/offline. Further, depending on the State’s requirement, professional tax returns also need to be filed at specified intervals.

Consequences of violation of professional tax regulation

While the actual amount of penalty or penal interest may depend on the respective State’s legislation, a penalty may be levied by all such states for not registering once professional tax legislation becomes applicable.

Further, there are also penalties for not making the payment within the due date and also failing to file the return within the specified due date.

For example: In the State of Maharashtra Rs 5/day is imposed as a penalty for delay in registration, Interest @ 1.25% per month of delay in payment, a penalty of 10% of the amount of tax in case of delay/non payment of professional tax, Rs 1000 – Rs 2000 penalty for delay in filing the return