The state government levied a professional tax on salaried individuals, entrepreneurs, and professionals engaged in any trade, profession, or employment. Income tax is calculated as a percentage of an individual’s income, which varies from state to state. The Professional Tax is considered a direct tax and is deductible from the taxable income of the individual or entity. The employer collected the tax from the employee’s salary and paid it to the state government. The tax is paid directly to the state government for self-employed individuals and businesses.
Professional tax varies from state to state. Each state has the authority to determine the rate and structure of professional tax based on its own economic and social conditions. As such, professional tax rates may differ depending on the state’s revenue needs, demographics, and the number of people who earn taxable income from various professions. The maximum limit of PT is RS 2500 per year.
The respective State Governments collect the professional tax, and the rates and rules governing the tax may vary from state to state. The tax is levied quarterly or yearly based on the income earned during that period.
It is applicable in India and managed by the respective state governments. Each state has its own set of professional tax rules and regulations.
In India, professional tax is applicable in the following states:
There are certain exemptions and deductions available under the professional tax, which are as follows: