27/06/2015

What is Professional Tax In India and slab rate of Professional Tax

Summary What is Professional Tax In India and slab rate of Professional Tax
What is this professional tax in my salary slip? Does everyone pay this professional tax? Government takes income tax then why is this professional tax? Why there is no such professional tax in Delhi? 

 What Is PT (Professional Tax)
  • Professional tax is levied upon every employee of government or private organization subject to a minimum limit of earning.
  • It is also taken from professionals such as doctor, CA, lawyers and consultants.
  • Some state governments give relaxation to low earning people.
  • The professional tax is similar to income tax except it is taken by state government. Unlike income tax return filing you need not to file return professional tax return.
  • Not every state charges this tax.
  • The money collected from this tax should be spent on unemployed people of the states. The unemployment allowance is given from this collection.
  • According to law, any state, government can’t charge maximum Rs 2,500 per year as professional tax.
  • It is charged according to the income slab.
  • It is eligible for income tax saving. You can deduct the professional tax paid from your gross salary for income tax calculation. 
How PT is Paid to the State Government
Commercial tax department of state governments also makes the rule of professional tax. This is the same department which collects sales tax and VAT. But the collection of this tax goes to the municipal corporations.
It is the duty of every employer to collect the professional tax from its employee and deposit the total amount with the municipal corporation. The employer deducts it from the salary of the employee every month. In some states and municipal corporation, professional tax can be paid online as well.  State governments have the portal for conducting this business. The municipal corporation website also handles this operation. As I have told no state government can charge it more than Rs 2,500 from an employee. However, they can charge lower PT. They can also decide the slab for different amount of PT. Hence, every state has different slabs and rates.

How You Can Pay Professional Tax
Anyone who starts earning needs to pay professional tax. The salaried person should not worry as their employer deducts and deposit it with the authorities. But the self employed have to register them within 6 months of earning. Registration is done at the sales tax offices of the district.
1.       You need to fill an enrollment or registration form.
2.       After the submission you will get the registration number.
3.       With this registration number, you can go to the bank and deposit it.
4.       You need to fill a Challan for the deposit.
Gradually many states have shifted to the online mode. Now you can register yourself and pay the professional tax online as well.

What If You Don’t Pay
It is similar to not paying income tax. In this case the sales tax department takes penal action.
  • It can charge a heavy penalty which can go up to double of the total PT.
  • It can charge interest for late payment which can go up to 2% per month.

States Charging PT
Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Maharashtra, Meghalaya, Madhya Pradesh, Orissa, Karnataka, Kerala, Tamil Nadu, Tripura and West Bengal.

States Not Charging PT
Haryana, Uttar Pradesh, Rajasthan, Punjab, Delhi and others do not levy professional tax.

Professional Tax in Maharashtra
Maharashtra uses a full limit of professional tax. Here, Most of the employees pay Rs 2,500 annually as PT. It has given some relaxation to those who earn very less or involved in petty jobs. All other wage earners and white collared professionals are charged Rs 2,500 Annually.
Monthly Salary
Professional Tax Rate Per Month
Up to Rs 7,500 (Rs 10,000 For Women)
Nil
From Rs 7,500- 10,000
175
Above Rs 10,000
Rs 200 per month, but Rs 300 in February
In Maharashtra you can save 20% of professional tax if you pay in lump sum for five years. For five years the total tax has been Rs 12,500 but you have to pay only Rs 10,000.
You can see detailed, professional tax slab rate of Maharashtra in this page.

Professional Tax in Karnataka
In Karnataka, you pay less PT than Maharashtra. It is Rs 2,400 per year for salaried who earns more than Rs 15,000/month.  Those who earns less than Rs 10,000, there is no need to pay it. The professional tax slab rate of Karnataka is given below

Monthly Salary
Professional Tax Rate Per Month
Up to Rs 15,000
Nil
Above Rs 15,000
Rs 200
The above rate is for salaried person. For the self employed, professionals and businessman there are different tax slabs. If differs according to the profession. To know the exact tax slab rate visit the commercial tax department website of Karnataka government. The karnataka government does not charge professional tax from the senior citizens.
If you don’t pay professional tax on time, You have to give interest of 1.25%/month. Also, you may have to pay maximum penalty of 50% of the total due amount.
You can online register yourself for PT in Karnataka. You can also pay it online. Visit E-prerana portal for professional tax related services.

Professional Tax in West Bengal
West Bengal Government also charges this tax, but it is not very high for low income group. Professional tax of Rs 200/month is for those who gets a salary of more than Rs 40,000/month. Those who get salary less than Rs 8,500/month are not liable to pay tax.
Monthly Salary
Professional Tax Rate Per Month
Up to 8,500
Nil
8,501- 10,000
90
10,001-15,000
110
15,001 –  25,000
130
25,001 – 40,000
150
Above 40,000
200
The Above  slab rate is for salaried person. For All other self employed and professionals different rates are applicable. These rates can be found on the commercial tax website of West Bengal Government. There is also a FAQ section in the portal which is very helpful. You can also enroll and pay the professional tax online in West Bengal. Even, HDFC bank also gives professional tax payment  facility from its portal.
Late payment of tax attracts interest @ 1 % per month in West Bengal.

Professional Tax in Madhya Pradesh
In Madhya Pradesh it is charged on the yearly salary. However, if your salary is less than 1,50,000/year, you need not to pay it. If you earn more than 15,000 per month i. e. 1,80,000 annually you have to pay PT of Rs 212/month in Madhya Pradesh.
Yearly Salary
Professional Tax Rate Per Month
Up to 1,50,000
Nil
1,50,001 – 1,80,000
125
Rs. 1,80,001 and above
212
At the failure of non payment  Madhya Pradesh government can charge a penalty of 2% per month.
Registration for professional tax can be done online in Madhya Pradesh. You can also pay the professional tax online through its Cyber treasury portal.

Professional Tax in Tamil Nadu
You have to pay this tax in Tamilnadu as well. However, The process of professional tax payment in Tamilnadu is slightly different. It is charged half yearly in Tamilnadu. The assessment of income is also done half yearly. The slab rate  in Tamilnadu is also given half yearly. Half yearly professional tax is collected from the salary of August and January.

Half Yearly Salary
Professional Tax Rate Per 6 Months
Up to 21,000
Nil
21,001 – 30,000
100
30,001 – 45,000
235
45,001 – 60,000
510
60,001 – 75,000
760
75,001 and above
1095

It is difficult to submit  PT  online in Tamilnadu. HDFC bank website does mention the e-payment but there is no way forward through the Tamilnadu government’s commercial taxes website. If you know the proper way of online deposit of professional tax in Tamilnadu, please add in the comments section.
You can download the form from the website of Chennai corporation and Coimbatore corporation. Chennai corporation website also provides the professional to download.

Professional Tax in Andhra Pradesh
In Andhra Pradesh you don not need to pay it if your salary is less than Rs 15,000/month. The slab rate of salaried and wage earners is given below.

Monthly Salary
Professional Tax Rate Per Month
Up to Rs 15,000
Nil
From Rs 15,001- 20,000
Rs 150
Above Rs 20,000
Rs 200
Those who does not earn a salary or regular wage will have to pay PT according to the different slab rate. This professional tax slab rate can be found from this link.
In Andhra Pradesh you can pay professional tax online. First You have to register on the Andhra Pradesh Government commercial tax portal. After the registration you can pay the PT online.

Professional Tax in Gujarat
Gujarat is the one state which charges low professional tax. You need not to pay it if your salary is less than Rs 3,000/month. But Gujarat levies maximum Rs 80/month as  PT.
Below is the table according to the income slab in Gujarat.
Monthly Salary
Professional Tax Rate Per Month
Less than Rs 3,000
Nil
3,000-6,000
Rs 20
6,000 – 9,000
Rs 40
9,000- 12,000
Rs 60
Above 12,000
Rs 80

The above slab rate is for salaried or wage earner. There is a separate professional tax schedule for professionals, self employed and businessman.
You can find all the forms related to PT from the website of commercial taxes, Gujarat.
If you work within the limit of the Ahmadabad municipal corporation, you can also pay professional tax online. However this service is for only business establishments.

Professional Tax In Odissa
Odissa has many slabs of it. It starts from Rs 30/month and goes up to Rs 200/month.
Monthly Salary
Professional Tax Rate Per Month
Up to 5,000
Nil
5,001 – 6,000
30
6,001 –8,000
50
8,001 – 10,000
75
10,001 – 15,000
100
15,001 –20,000
150
Above 20,000
200

The above slab rate is for salaried.
You can do online registration for professional tax in Odisha. Payment of professional tax can be also done online.

Professional Tax in New Delhi
In Delhi there is no professional tax. However, Municipal corporation of Delhi has proposed to levy it on those who earn more than Rs 30,000/month.


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