Professional Tax in India

Professional Tax is a tax imposed by some of the state governments in India on persons earning income from salary or practicing professional such as Chartered Accountant, Company Secretary, Lawyer, Doctor etc. The state government derive the power to impose professional tax under Article 276 of the Constitution of India.

The professional tax is levied by particular Municipal Corporation; however the Parliament of India have placed a ceiling of Rs. 2,500/- as the maximum amount which can be collected as professional tax in the year. The professional tax is based on slab which differ from state to state.
In case of employees it is deducted from salary by the employer which then deposit to the professional tax department, however in case of company, Director of a Company, LLP, designated partners or partners of LLP, partnership firm, individual partner, self-employed professional or owners of any business the professional tax depends upon gross turnover in the preceding year. Professional Tax in India

The persons falling under the ambit of professional tax and the employers employing staff for their business need to obtain registration with appropriate department designated for the purpose of compliance of professional tax in a particular state within 30 days of coming under the purview of the applicability of professional tax.

Each professional, the Directors of Company, designated partners of the LLP or any other employer is under obligation to seek above mentioned registration and to ensure that professional tax is deducted from the salary of employees or deposited on behalf of others. The deducted professional tax from the employees must be deposited in the appropriate office designated by the state government and a return of professional tax must be filed specifying the payment of professional tax.