PROFESSION TAX
Profession Tax is a Direct Tax that applies to the person who is earning income by either practicing employment, calling or trade or a profession. This tax is levied by the State Government or Union Territory in India.
Profession Tax rates in key states of India
| State | Income Per Month | Tax Rate |
| Andhra Pradesh | Less than 15000 15000-20,000 20,000 and above | NIL 150 200 |
| Gujarat | Up to Rs 5999 Rs 6000- Rs 8999 Rs 9000- Rs 11999 Rs 12000 and above
| NIL 80 150 200 |
| Karnataka | Up to Rs 15000 Rs 15001 onward Up to Rs 11999 Up to Rs 12000 to 17999 Up to Rs 18000 to Rs 29999 Up to Rs 30,000 to 44999
| NIL 200 NIL 120 180 300 |
| Kerala | Rs 45000 to 59,999 Rs 60,000 to Rs 74999 Rs 75000 to Rs 99,999 Rs 10,000 to 124,999 Rs 125,000 onwards
| 450 600 750
1000 1250 |
| Maharashtra | Up to Rs 7500 Up to Rs 10,000 Rs 7500- Rs 10,000 Rs 10,000 onwards
| NIL ( For male) NIL( For Female) 175( For male) Rs 200 for 11 months+ Rs 300 for 12 months |
| Telangana | Up to Rs 15000 15000- 20,000 Rs 20,001 onwards Up to 5 years (For professionals such as legal practitioners, CA, architect,etc.
| NIL 150 200 2500 Per annum |
| West Bengal | Rs 10,001- 15000 Rs 15,001 – 25,000 Rs 25,001 – Rs 40,000 Rs 40,0001 and above
| 110 130 150 200 |
Profession Tax Liability
It is applicable on the following classes of person:
- An individual
- HUF
- A Company/Firm/Co-operative Society/Association of persons or a body of individuals, whether incorporated or not
Who pays Profession Tax?
All Self-Employed persons who carry out profession or trade on self- basis and fall under the ambit of profession tax becomes liable to pay the tax to the State Government.
The Commercial Taxes Department of a State or a Union Territory is the nodal agency that does collection of Profession tax as per the pre-determined tax slab. It varies for each state and Union territory. Tax applies to the annual taxable income of the individual. It can be paid either annually or monthly. Self-employed taxpayers need to obtain a Certificate of Enrollment from prescribed authority (of the concerned state) in the prescribed manner.
In case a person is a salaried individual or a wage earner, the employer becomes liable to do tax deduction every month according to profession tax slab and deposit the same with the State Government. The employer needs to get a Certificate of Registration from the concerned authority to be able to deposit the deducted profession tax.
Maximum Profession Tax amount
A maximum of Rs. 2,500 can be levied as a professional tax on any person per financial year.
Profession Tax Is Deductible Under Section 16 (iii) Of the Income Tax Act
According to Section 16 (iii) of the Income Tax Act 1961, the profession tax paid by an employee is allowed as a deduction from his/her gross salary income.
List of State and Union Territories that levy Professional Tax is as follows:
- Andhra Pradesh
- Karnataka
- Maharashtra
- Tamil Nadu
- Assam
- Kerala
- Meghalaya
- Tripura
- Bihar
- Jharkhand
- Madhya Pradesh
- West Bengal
- Manipur
- Mizoram
- Odisha
- Puducherry
- Sikkim
- Telangana
- Nagaland*
- Chhattisgarh
- Gujarat
State or Union Territories that do not levy
Professional Tax are as follows:
-
Arunachal
Pradesh
-
Himachal
Pradesh
-
Delhi
-
Haryana
-
Uttar
Pradesh
-
Uttarakhand
-
Andaman
and Nicobar Islands
-
Daman
& Diu
-
Dadra
and Nagar Haveli
-
Lakshadweep
-
Jammu
& Kashmir
-
Punjab
-
Rajasthan
-
Chandigarh
-
Goa
