What is Professional Tax?
Professional tax is a tax that a state government levies on any individual who earns income through any medium. Unlike the name suggests, it is not just for professionals but for all individuals.
Who is applicable for Professional Tax?
- Business including freelancers
- Professionals including CA, CS, Doctors
- Employees
It is applicable once the person begins his profession or business within 30 days of starting the profession. If the company has its presence in different places, it is required to register for each such place.
Exemption from Professional Tax:-
Following individuals are exempted from paying this tax:
- Parents whose children have a permanent disability or mental disability.
- Members of the forces as defined in the Air Force Act, 1950, Army Act, 1950, and the Navy Act, 1957. Also includes members of auxiliary forces and serving in the state.
- Workers in the textile industry (Badli workers).
- Individuals who have a permanent physical disability (including blindness).
- Women as an agent under the Director of Small Savings or Mahila Pradhan Kshetriya Bachat Yojana.
- Also, individuals, above the age of 65 years.
Maximum Tax Amount
A maximum of Rs. 2,500 can be levied 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 professional tax paid by an employee is allowed as a deduction from his/her gross salary income.
Professional Tax Rates of Key States of India
As this tax is a state subject, the rate varies from one state to another. While some states might charge it as a percentage value, other states tend to charge it as a fixed amount based on income slabs. The following are the rates in key states in India:
Professional Tax Slabs in Andhra Pradesh
| Income per Month | Tax Rate/Tax Amount (p.m.) |
| Less than ₹15,000 | Nil |
| ₹15,000 to less than ₹20,000 | ₹150 |
| ₹20,000 and above | ₹200 |
Professional Tax Slabs in Gujarat
| Income per Month | Tax Rate/Tax Amount (p.m.) |
| Up to ₹5999 | Nil |
| ₹6,000 to ₹8,999 | ₹80 |
| ₹9,000 and ₹11,999 | ₹150 |
| ₹12,000 and above | ₹200 |
Professional Tax Slabs in Karnataka
| Income per Month | Tax Rate/Tax Amount (p.m.) |
| up to ₹15,000 | Nil |
| ₹15,001 and above | ₹200 |
Professional Tax Slabs in Maharashtra
| Income per Month | Tax Rate/Tax Amount (p.m.) |
| Up to ₹7,500 | Nil(for male) |
| Up to ₹10,000 | Nil(for female) |
| ₹7,500 to ₹10,000 | ₹175(for male) |
| ₹10,000 and above | ₹200 for 11 months + ₹300 for 12th month |
Professional Tax Slabs for Telangana
| Income per Month | Tax Rate/Tax Amount (p.m.) |
| Up to ₹15,000 | Nil |
| ₹15,001 to ₹20,000 | ₹150 |
| ₹20,001 onwards | ₹200 |
| Up to 5 years (For professionals such as legal practitioners, CA, architects, etc.) | Nil |
| Over 5 years (For professionals such as legal practitioners, CA, architects, etc.) | ₹ 2,500 (per annum) |
Professional Tax Slabs in West Bengal
| Income per Month | Tax Rate/Tax Amount (p.m.) |
| Up to ₹10,000 | Nil |
| ₹10,001 to ₹ 15,000 | ₹ 110 |
| ₹ 15,001 to ₹ 25,000 | ₹ 130 |
| ₹ 25,001 to ₹ 40,000 | ₹ 150 |
| ₹ 40,001 and above | ₹ 200 |
Frequently Asked Questions
What is the procedure to pay professional tax? Is any return to be filed?
This is a State-specific query. However, in general, a professional tax may be paid either online/offline. Further, depending on the State’s requirement, the returns also need to be filed at specified intervals.
Is it mandatory to pay professional tax?
Yes, if you are a salaried individual, it is mandatory to pay professional tax.
Is Professional tax applicable in Union territories?
As Union Territories are small regions of the country, they tend to generate lower revenue than states. Hence, professional tax is not applicable for employees working in a Union Territory.
Confused about your income tax? Check out our article on how you can Solve your income tax puzzle with us.
+91 97234 00220
support@counselvise.com