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VAT, CST and professional tax

Professional Tax

Professional Tax

The state government levies profession tax and collects. It is direct tax. A person earning an income from practicing a profession or salary are required to pay this tax. In India, every month profession tax is imposed. The maximum amount payable per year is Rs 2,500 and in line with tax payer’s salary there are predetermined slabs.  To pay professional tax it is mandatory.

Professional Tax Rate:

The state Government levies profession tax and is different in different states. To govern professional tax of that particular state, every state has its own laws and regulations. The State government is empowered under Article 276 of the Constitution 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.

Professional Tax Return filing:         

A Professional tax may be paid either online or offline. Depending on the state’s requirement professional tax return also need to be filed at specified intervals. Payment of professional tax in Maharashtra is based on the date of enrolment. Due date for payment is 30th June of that year for entities enrolling before the commencement of a year on or before 31st May. Rs 1,000 is a penalty for late filing of professional tax return. Penalty of 10% of tax due on late payment of professional tax.

Professional Tax Exemption:

The amount paid towards Professional tax is exempt from Income tax.

Professional Tax for Employees:

All paid employees of an organization and independent professionals fall under its various categories. On predetermined slabs and on the basis of the salary or monthly income levels, Professional tax is calculated. From your salary, this amount is deducted by your employer, who is responsible for depositing it with the relevant government office.

If this tax is not paid by any employer with a ‘Certificate of Registration’, it can be penalised by the government.