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Professional Tax In India

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Tax is something that can be called as a duty imposed upon individuals who are earning or professionals who are businessmen, employees or owners of an organization, etc. Professional tax is paid in India. Each and every person who is engaged in private occupation or is working with any private organization has to pay this duty that is mandatory.

Professional Tax in India

The rate of this duty or tax is not alike in all states. In India, this duty is compelled by all different states like West Bengal, Madhya Pradesh, Tamil Nadu, Gujarat, Karnataka, Andhra Pradesh, and Maharashtra. These are some important states that impose this duty in India.

This duty plays an important role as a momentous basis of returns for the government.  Tax is divided according to the profession and income of a person. There are different blocks although prescribed by the tax officers as per government rule.  Thus, tax is collected from different class of people according to their salary, income, and occupation.

Are qualified taxpayers appropriate for income tax deduction?

Yes, all the people who are paying such tax on time are eligible for IT deductions. As prescribed in sec 16(iii) of the Income Tax act, professional tax on service or duty on service imposed by the state, under article 276(2) of the Constitution of India, is permissible in the form of a deduction from the salary earnings.

Who is eligible to pay this tax?

Professional tax is basically and has to be paid by employees, and such preconditions are laid by for them to satisfy the deductions. If a person has failed to pay the tax, then such deductions will be canceled and not allowed further.

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What are the other conditions for deduction?

When it comes to professional tax payment, the employers pays this tax on behalf of the employee, further this amount is taken to be as the fringe benefit, which is again a benefit for the employee as this amount can be collected by the employee later.


Maximum amount under article 276(2):

As prescribed in 276(2) of the Constitution of India, State Government, municipality, or other legislative agency which is authorized under Article 276(2) can charge this duty on service from an individual, focus to an upper limit of Rs. 2,500 per year.

Slab Rates in professional tax

Rates of professional tax slab are appraised suitably on the basis of a combination of various constituents.  The very first consideration to make here is, if the assesses is an organization or an individual.  If the assessee is a person then as a matter of consideration, the age and gender is considered to be recorded so as to define the slab. With this, the slab rate is determined and divided. Also the earnings and income rate is taken into calculation to evaluate the slab rate correctly. Agricultural revenue is not considered or calculated to determine the slab rate here.  So, here income tax in India is progressive and duty is levied in 3 slabs.

Define professional tax in Maharashtra

Professional tax is not very clearly defined to the people in Maharashtra. This duty is imposed on people who are businessmen, working professionals, vocations or service class individuals at state level. Income tax returns have a specific time of filing and it has to be filed at correct time.  The due date of this return is basically defined by the amount of revenue generated. Professional income tax returns cannot be different from what is prescribed by the government rules and regulations.  The Maharashtra State Tax on Professions, Callings and Employments, Trades, Act, 1975 normalizes the teachings in relation to Professional tax in Maharashtra. The duty is charged on institutes and individuals. Association in this structure would integrate a company, a proprietary business concern, a firm, a Hindu Undivided Family, a society, club, an alliance of people or any other association as laid down by the Act.

Cycle of Returns

The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 reveals that:

i) If the yearly Professional income tax accountability Rs.5, 000, the professional tax return has to be presented every year;

ii) If the yearly accountability for professional tax is elevated than Rs.5, 000 but below Rs.20, 000, quarterly tax has to be filed;

iii) If the yearly accountability for professional tax is more than Rs.20, 000; tax return has to be filed every month without fail

Duty on Individuals

All individuals residing in Maharashtra have to comply with this kind of tax or duty. They have to provide certificate other profession or service which is a Certificate of registration, which will notify that these individuals are engaged in specific occupation or service. This certificate will be given to the individuals by the Tax Government department. This certificate will be valid for 5 years which is best to offer service of one time payment. So, you can pay the total income tax at onetime rather than paying again and again.  For almost 4 years you can pay this tax and for the last year you are relieved from such payment.

Physically challenged individuals and senior citizens are exempted to pay this duty.

Duty on Organizations

Like individuals organizations are also enrolled to pay these duties with obtaining a Registration Certificate from Government bureau department so as to become eligible to pay the tax.  By this act, tax payments are made simple.  In case of an organization, acquiring certificate is important because it has an individual identity and is a legal unit.

In addition to that, returns have to be filed before the last day of a month to so that the fundamental details are known is association with particulars about incomes compensated and tax deducted in that consideration.

The last date for any individual of getting registration certificate is June 30th, if at all there are problems occurring in granting the registration certificate 1.25% interest should be claimed by individuals every month. All registration certificate owners are asked to get their payment invoices by the middle of June.


Individuals who make default payments of professional tax are composed of a fine or penalty. Penalty arises and is imposed when:


  • Where an individual provides false details about his registration and occupation, he has to pay 3 times the amount payable as penalty
  • If an individual fails to provide with registration certificate on time he will be responsible for paying fine of 2% of the amount payable
  • If an individual fails to pay on time the tax amount implied to him, he will have to pay a penalty of 10 times the total amount payable by him as the tax

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